The markets ended the day firmly in the green yesterday, with the Dow even topping 1,000 points in the midday session, but stocks were mixed in Tuesday's session.
The rally was based largely on hopes of a coronavirus vaccine, and as Walmart's earnings topped expectations but Home Depot did not.
Wall Street heard congressional testimony from Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin as well on Tuesday.
And further strains in the deteriorating U.S.-China relationship were putting a damper on market sentiment. Bloomberg reported that Nasdaq was planning new rules that would make initial public offerings more difficult for some Chinese companies.
Walmart posted stronger-than-expected first-quarter earnings as customers loaded up on low-margin items such as food and consumer staples amid the peak of the coronavirus pandemic.
Home Depot, however, posted earnings in the first quarter that were weaker than expected and the home-improvement retailer scrapped its 2020 profit guidance. The company said pretax costs to counter the coronavirus pandemic reached $850 million.
Powell, in prepared testimony ahead of his hearing before the Senate committee concerning the $2 trillion economic-relief package, is expected to say the Fed will double down on its commitment to do all it can to keep financial markets functioning and liquid.
But with all of this, the one story Jim Cramer is really paying attention to is Walmart.
The world’s largest retailer and a Dow component reported stronger than expected earnings before the opening bell. Walmart reported adjusted earnings per share of $1.18, exceeding estimates of $1.12. Revenue came in at $134.62 billion.
Walmart saw its U.S. comp sales increase 10% with U.S. ecommerce sales growing 74% in the quarter. “More than ever, the news this quarter is our amazing associates. They are rising to the challenge to serve our customers and our communities. I’m proud of how they’re adapting and performing. Our omnichannel strategy, enabling customers to shop in seamless, flexible ways, is built for serving the needs of customers during this crisis and in the future,” Walmart CEO and president Doug McMillon noted in the earnings release.
Amid the coronavirus pandemic and the consumer stockpiling that it sparked, Walmart noted “unprecedented demand” for products in numerous categories. Food, consumables and health & wellness stood out as notable winners.
In addition to withdrawing its guidance for the full-year, Walmart said costs increased to around $900 million in the quarter. The company tied growing expenses almost exclusively to the coronavirus, detailing increased hourly wages, bonuses for store and warehouse workers and enhanced safety protocols.
“While the short-term environment will be challenging, we’re positioned well for long-term success in an increasingly omni world,” Walmart chief financial officer Brett Biggs said in the earnings release.
"Walmart...is just so impressive," Cramer said on StreetLightning on Tuesday.