My top 10 things to watch Tuesday, Feb. 20
1. Walmart beats on earnings per share and revenue for the holiday quarter. E-commerce strong. Raises dividend. The Dow stock closed Friday at a record high and up another 4%-plus early Tuesday. The retailer in January said would split its stock 3-for-1.
2. Walmart also announces a deal to buy TV maker Vizio for $2.3 billion. Sees potential to boost its ad business through Vizio’s SmartCast Operating System, which allows users to stream free ad-supported content on their TVs. Vizio shares jump 15.5%.
3. Home Depot fourth-quarter EPS and revenue beat estimates but come in below year-ago levels. The Dow stock has been almost straight up since late October but falls 2.5% early Tuesday. Full-year guidance a bit light. Set to open about a dozen new stores in 2024.
4. Discover agrees to be bought by Capital One in a $35 billion deal. Two subprimes getting together. Huge finance deal in an industry where there’s been very little consolidation in ages. Discover shares pop 14.5%. Capital One stock falls 3.5%.
5. Wall Street is under pressure early Tuesday. The U.S. stock market was closed Monday for President’s Day. The Dow, the S&P 500 and the Nasdaq closed lower Friday. All three fell for the week, breaking five-week winning streaks.
- The CNBC Investing Club’s annual meeting is Saturday. We’ll explore what’s next for stocks now that we must accept that the Fed’s interest rate hikes have not really slowed the economy.
6. GlobalFoundries awarded $1.5 billion from the U.S. government to subsidize semiconductor production. The stock soars 6.5%. It’s the first major distribution from a Congress-approved $39 billion fund to boost domestic chip manufacturing.
7. Nvidia reports earnings after the closing bell Wednesday. Is this the most important stock in the market? The AI chip powerhouse, which keeps making new high after new high, is one of four Club names set to deliver quarterly results this week.
8. Evercore downgrades red-hot machinery group: Caterpillar to hold from buy. Two out of five of our Club industrial stocks are around record highs, and we’re encouraged by the set-up for the rest of the year. Caterpillar is a former Club holding.
9. China cuts mortgage rates. Travel there is much bigger year over year, which is great for our Club names tied to the world’s second-largest economy: Estee Lauder and Wynn Resorts.
10. Bernstein hikes Disney price target to $120 per share from $115. The analysts cite a crack down on Disney+ password sharing. Nelson Peltz proxy fight for Disney board seats very much in play.
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