The Home Depot, Inc. (HD) released its second quarter results on Tuesday, August 13. The company's shares rose more than 1% following the release which reported better-than-expected revenue and earnings.

The company reported revenue of $43.18 billion, up less than 1% from $42.92 billion during the same quarter last year. Revenue was slightly higher than analysts' expectations of $43.06 billion.

"The underlying long-term fundamentals supporting home improvement demand are strong," said Home Depot CEO, Ted Decker. "During the quarter, higher interest rates and greater macro-economic uncertainty pressured consumer demand more broadly, resulting in weaker spend across home improvement projects. However, the team continued to navigate this unique environment while executing at a high level."

Home Depot reported quarterly net earnings of $4.56 billion or $4.60 per diluted share. This is down 2.1% from net earnings of $4.66 billion or $4.65 per diluted share during the same quarter last year.

The Atlanta, Georgia-based home improvement retailer reported U.S. comparable store sales decreased 3.3% year-over-year, below analysts' expectations of a 2.1% decrease. The company also reported a 1.8% decrease in customer transactions during the quarter. Average consumer spending per ticket dropped over 1% to $88.90. Home Depot updated its fiscal 2024 outlook following the results and is now expecting a 3% to 4% decline in comparable sales.

The Home Depot, Inc. (HD) shares ended the week at $362.06, up 3% for the week.

Cisco Announces Earnings Report

Cisco Systems (CSCO) announced its fourth quarter and full-year results on Wednesday, August 14. The international technology company exceeded revenue estimates resulting in its shares rising 5% following the release.

The company's net sales for the fourth quarter totaled $13.64 billion. This was down 10% from sales of $15.20 billion during the same quarter last year but above analysts' estimates of $13.54 billion. Full-year revenue came in at $53.80 billion.

"We delivered a strong close to fiscal 2024," said Cisco CEO, Chuck Robbins. "In our fourth quarter, we saw steady customer demand with order growth across the business as customers rely on Cisco to connect and protect all aspects of their organizations in the era of AI."

Cisco reported net income of $2.16 billion or $0.54 per diluted share for the quarter. This was down from earnings during the same quarter last year of $3.96 billion or $0.97 per diluted share. The company reported net income of $10.32 billion for the year.

Cisco reported a decline in revenue across all geographic segments. The company's America segment reported an 11% decrease to $8.1 billion for the quarter, and its Europe, Middle East, and Africa segment returned a decrease of 11% to $3.5 billion. Sales in the Asia, Pacific, Japan and China segment fell by 6% to $2.1 billion. Product revenue in Security and Observability increased 81% and 41%, respectively, primarily due to the acquisition of cybersecurity firm Splunk. Cisco's board of directors declared a quarterly dividend of $0.40 per common share payable on October 23, 2024, to stockholders of record at the close of business on October 2, 2024. For fiscal year 2025, the company expects revenue to be between $55.0 billion to $56.2 billion.

Cisco Systems (CSCO) shares ended the week at $49.46, up 9% for the week.

Walmart Releases Earnings Report

Walmart Inc. (WMT) announced its second quarter earnings on Thursday, August 15. The company's shares climbed 6% after the company delivered an earnings report that included strong revenue growth.

The company posted quarterly revenue of $169.34 billion, up 4.8% from $161.63 billion reported during the same quarter last year. This exceeded analysts' expectations of $168.63 billion.

"Our team delivered another strong quarter," said Walmart CEO, Doug McMillon. "Each part of our business is growing - store and club sales are up, eCommerce is compounding as we layer on pickup and even faster growth in delivery as our speed improves. Our newer businesses like marketplace, advertising, and membership, are also contributing, diversifying our profits and reinforcing the resilience of our business model."

For the quarter, Walmart reported net income of $4.50 billion or $0.56 per adjusted share. This was down from the $7.89 billion or $0.97 per adjusted share reported for the same quarter in the previous year.

The Arkansas-based retailer reported global eCommerce sales growth of 21% for the quarter.Walmart's U.S. comparable sales, excluding fuel, increased 4.2% for the quarter. Walmart's membership-based warehouse store, Sam's Club, also reported an increase of 5.2% in comparable sales, excluding fuel. The company revised its full-year outlook and expects net sales to increase between 3.75% to 4.75% and adjusted earnings per share to range from $2.35 to $2.43.

Walmart, Inc. (WMT) shares ended the week at $73.45, up 7% for the week.

The Dow started the week of 8/12 at 39,556 and closed at 40,660 on 8/16. The S&P 500 started the week at 5,352 and ended at 5,554. The NASDAQ started the week at 16,794 and finished at 17,632.

U.S. Treasury yields trended lower early in the week as investors digested the latest economic data reflecting cooling inflation for consumer goods. Yields rose later in the week after reports that unemployment claims dropped signaling a strong demand in the labor market.

On Wednesday, the U.S. Bureau of Labor Statistics announced that the consumer price index (CPI), which measures the cost of dozens of everyday consumer goods, increased 0.2% in July, in line with economists' forecast. The CPI year-over-year fell to 2.9%, its lowest level since March 2021 and slightly lower than economists' projections of 3.0%.

"Today's CPI print removes any lingering inflation obstacles that may have been preventing the Fed from starting the rate cutting cycle in September," noted Chief Global Strategist at Principal Asset Management, Seema Shah. "Yet, the number also suggests limited urgency for a 50 basis point cut."

The benchmark 10-year Treasury note yield opened the week of August 12 at 3.95% and traded as low as 3.81% on Wednesday. The 30-year Treasury bond opened the week at 4.23% and traded as low as 4.10% on Wednesday.

On Thursday, the U.S. Department of Labor reported that initial claims for unemployment decreased by 7,000 to 227,000 for the week ended August 10. This came in lower than economists' forecast of 235,000 claims for the week. Continuing unemployment claims decreased by 7,000, reaching 1.86 million.

"The data bear watching for signals about a more material weakening in the labor market going forward, which would have implications for [Federal Reserve] policy," said chief economic at High Frequency Economics, Carl Weinberg. "Right now, they signal modest economic slowing at worst, not contraction. There is no call for emergency or massive Fed rate cuts in today's outcome."

The 10-year Treasury note yield finished the week of 8/12 at 3.89%, while the 30-year Treasury note yield finished the week at 4.14%.

Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, August 15. The survey showed mortgage rates increased only slightly following economic reports of lower inflation earlier in the week.

This week, the 30-year fixed rate mortgage averaged 6.49%, up from last week's average of 6.47%. Last year at this time, the 30-year fixed rate mortgage averaged 7.09%.

The 15-year fixed rate mortgage averaged 5.66% this week, up from last week's 5.63%. During the same week last year, the 15-year fixed rate mortgage averaged 6.46%.

"While rates increased slightly this week, they remain more than half a percent lower than the same time last year," said Freddie Mac's Chief Economist, Sam Khater. "In 2023, the 30-year fixed-rate mortgage nearly hit 8%, slamming the brakes on the housing market. Now, the 30-year fixed-rate hovers around 6.5% and will likely trend down in the coming months as inflation continues to slow. Lower rates are good news for potential buyers and sellers alike."

Based on published national averages, the savings rate was 0.45% as of 7/15. The one-year CD averaged 1.85%.

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