20Feb2018 Pre-Market Commentary: Wall Street To Open Lower, DOW Is Heading For Another Triple-digit Drop, Pressured By Walmart Earnings Miss, Rising Bond Yields Threaten Six-day Winning Streak

Here is the current market situation from CNN Money

European markets are mixed today. The CAC 40 is up 0.12% while the DAX gains 0.09%. The FTSE 100 is off 0.26%.

Walmart worries, bond yields threaten six-day winning streak

(Reuters) – U.S. stock index futures fell more than half a percent as Wall Street returned from a long holiday weekend on Tuesday, a rise in bond yields and underwhelming results from Walmart halting a six-day winning streak for the major indexes.

Qualcomm raises offer for NXP, Elliott backs new bid

(Reuters) – U.S. chipmaker Qualcomm Inc raised its offer to buy NXP Semiconductors NV to $127.50 per share on Tuesday, and said it now has the backing of the shareholder group led by Elliott Management that opposed the previous proposal.

Walmart profit drops, online sales slow in key holiday quarter

NEW YORK (Reuters) – Retail behemoth Walmart Inc on Tuesday reported a lower-than-expected quarterly profit and posted a sharp drop in online sales growth during the critical holiday period, sending its shares slumping more than 6 percent in premarket trade.

Albertsons to buy Rite Aid in cash-and-stock deal

(Reuters) – U.S. grocery chain operator Albertsons Companies Inc said on Tuesday it would buy drugstore chain Rite Aid Corp in a cash-and-stock deal to create a company with $83 billion in revenue.

Home Depot’s profit, sales top estimates on higher traffic, spending

(Reuters) – Home Depot Inc’s profit beat market estimates for the sixth straight quarter on Tuesday as more shoppers visited the No.1 U.S. home improvement chain and spent more on average amid an improving housing market.

Exclusive: GM offers $2.2 billion debt for equity swap in return for Seoul’s support – sources

SEOUL (Reuters) – General Motors has offered to convert debt of around $2.2 billion owed by its ailing South Korean operation into equity in exchange for financial support and tax benefits from Seoul, four sources with direct knowledge of the matter said.

Murdoch’s Fox seeks to win bid approval by extending Sky News guarantee

LONDON (Reuters) – Rupert Murdoch’s Twenty-First Century Fox has strengthened its offer to protect the independence of Sky’s loss-making news channel to try to overcome regulatory concerns about Fox’s takeover of the parent company.

HSBC profit disappoints as CEO Gulliver bows out

HONG KONG/LONDON (Reuters) – HSBC Holdings reported a smaller than expected rise in annual profits and unveiled plans to raise up to $7 billion to bolster its capital, as CEO Stuart Gulliver hands over to a new leadership team on Tuesday.

Airbus sees no demand for bigger A350 for now

TOULOUSE, France (Reuters) – Airbus is not planning a larger A350 jet and will focus on developing existing versions of the widebody aircraft, an executive said on Tuesday.

Frontrunning: February 20

Dollar extends recovery as traders eye Treasury auction (Reuters)

Gas Tax Increase Would Hit Trump States Hardest, Koch Groups Say (BBG)

House Republicans Take First Step to Tackle Opioid Crisis (WSJ)

Trump Defiant Despite Mueller’s Warning Shot on Russia Meddling (BBG)

Florida school staff members to return this week after mass shooting that killed 17 (Reuters)

Students to Ratchet Up Anti-Gun Protests (WSJ)

Britain urges EU to work jointly on Brexit deal, won’t undercut rivals (Reuters)

Facebook Feels Heat in Russia Probe (WSJ)

Forget tourism: Pyeongchang’s legacy probably debt and anger (AP)

Refiner goes belly-up after payouts to Carlyle Group (

“The Market Has Gotten The Joke”: Guggenheim CIO Warns Of 1987 Replay For Stocks

“Investors are coming to terms with the idea that the Fed will keep raising rates because of inflation and economic pressures,” says Guggenheim Partners’ Global CIO Scott Minerd, adding “the market is finally getting the joke… moving from complacency about The Fed to a realization that it may be behind the curve.”

Via Guggenheim Partners,

The last two weeks have been pretty exciting, certainly a lot more interesting than anything we’ve been through over the last year. Given the recent market dislocation, there is a basis to rebalance portfolios and do trades to take advantage of relative repricing. At a macro level, it should not surprise anyone that rates have begun to rise—we have been talking about the Federal Reserve (Fed) tightening, we have been talking about how the Fed is behind the curve, how the market has not believed the Fed, and that someday this was going to have to get re …

Top South Korean Crypto Regulator Found Dead “From Unknown Cause”

The struggle between the South Korean Ministry of Finance and Ministry of Justice over the future of cryptocurrency regulation – a debate that mostly played out during December and January – terrified crypto traders who feared the South Korean government was on the verge of – wittingly or unwittingly – devastating the market.

Headlines about a pending ban in South Korea helped drive the bitcoin price more than 60% lower in January – its largest monthly drop in years – but now that the debate has been settled, the price has been steadily climbing again, breaking above $11,500 earlier today…

…having nearly doubled off the mystery dip-buyer lows…

Wal-Mart Tumbles After Missing Earnings, Guidance Disappoints, Online Sales Slow

Walmart reported Q4 non-GAAP EPS of $1.33 (GAAP $0.73), missing consensus est. of $1.37 if more than $1.22 a year ago, largely thanks to the company’s plunging tax rate (Q4 at 21.6%, down 9.2%) on revenue of $136.3BN, also above the est. of $134.83BN, and up 4.1% from the $130.9BN a year earlier (the number includes $1.12BN from membership and other income, down 5.8% y/y). For the full fiscal year 2018, total revenue was $500.3 billion, an increase of $14.5 billion, or 3.0%.

More disappointing was Walmart’s Q4 gross profit, which declined 61bps to 24.1%, even as the company’s effective tax rate tumbled 917bps to 20.3%. Furthermore, gross merchandise volume (a measure of all the goods it sells online) rose 24% in 4Q vs 54% in 3Q;

Also disappointing was Walmart slower Q4 eCommerce sales, which rose only 23% in Q4, down from an average of 50% in the last three quarters. Walmart has been aggressively investing in its eCommerce business to catch up with Amazon, and the efforts had generally paid off until the current slowdown, even if online shopping still makes up only about 4% of the company’s nearly $500bn in annual sales. Looking ahead, the company hopes that eCommerce sales growth will revert back to “approximately 40%.”

But the biggest disappointment to investors is that despite reporting stronger than ex …

BHP Is Still Caught Between a Rock and an Oil Well

BHP is emerging as a copper powerhouse, which helped buoy its first-half earnings. That strength conceals some troubling signs in oil and coal, however.

Is Reckitt’s Deal Machine Still Up to Snuff?

As the battle to buy Pfizer’s $20 billion consumer business heats up, Lysol-owner Reckitt Benckiser is trying to convince investors that its acquisition record is clean.

The Big Shift Driving Tech Profits​

Big tech companies learning to look past the initial sale as subscriptions build an important base of recurring revenue.

Key Words: Trump seizes on tweets by Facebook executive as proof Russia didn’t tilt election to him

Rob Goldman said in a series of threaded tweets on a nonverified Twitter account that most Russian ad spending occurred after the U.S. election in November 2016 and that “swaying the election was *NOT* the main goal.”

Jeff Reeves’s Strength in Numbers: This stock may be your best bet in the recovering energy sector

Anadarko Petroleum is adapting to oil’s new reality, writes Jeff Reeves.