Diamonds and Dogs
A tale of two Dow components. Walmart (WMT) is the dog of the day down 3% following disappointing earnings and lowered guidance for the third quarter. Lower guidance and preannouncements may become the theme for the next month. With revenue of $119 billion in the quarter and $487 billion for the year, Walmart needs to find another planet to boost sales because they've pretty much saturated this planet with stores. The good news for Walmart is the yield is bumping up toward 3% and the stock trades for less than a market multiple.
Home Depot (HD) is the diamond of the day up 3% to all-time highs following better than expected earnings and raised guidance. Home Depot is in the sweet spot right now with a US centric business focused on the housing and homebuilding sector which is starting to heat up. The bad news for Home Depot is a lot of the big news has been priced in with the stock trading for 20 times earnings.