Walmart Boosts Forecasts Again Amid Strong Sales and Robust Holiday Demand

LOCAL MARKET COMMENTARY

The JSE's Top 40 index rose 0.1% to 76,300 points, while the All Share index gained 0.12%, closing at 84,526 points. Markets were lifted by expectations of a 25-basis-point interest rate cut by the SARB on Thursday, following a similar move in September, and anticipation of October’s inflation data. Meanwhile, President Cyril Ramaphosa announced South Africa's priorities for its G20 presidency, including inclusive economic growth, food security, and artificial intelligence. The presidency transition occurred at the Rio de Janeiro summit, where Brazil's President Lula urged accelerated climate targets.

EUROPEAN MARKET COMMENTARY

Europe's main stock index hit a three-month low on Tuesday as heightened geopolitical tensions drove investors toward safe-haven assets. Russia's announcement of expanded conditions for nuclear retaliation and claims of U.S.-made missiles used by Ukraine intensified global concerns. Meanwhile, European markets saw key earnings reports from Imperial Brands and Thyssenkrupp, alongside the release of finalized eurozone inflation data for October. On Monday, European markets also closed lower, reflecting a cautious investor stance ahead of regional inflation updates.

US MARKET COMMENTARY

The Nasdaq rose over 1%, and the S&P 500 also closed higher on Tuesday, driven by gains in technology stocks ahead of Nvidia's earnings and a boost from Walmart after it raised its annual forecasts. In contrast, the Dow ended the session lower. Markets initially dipped amid geopolitical tensions, as Russian President Vladimir Putin expanded conditions for nuclear retaliation and Ukraine reportedly used U.S.-made missiles in a strike deep inside Russia. Investors are also weighing President-elect Donald Trump's administrative picks, including Dr. Mehmet Oz for Medicare and Medicaid Services and Howard Lutnick as Commerce Secretary.

ASIA MARKET COMMENTARY

Asia-Pacific markets mostly declined this morning as investors analysed Japan's October trade data. Exports grew 3.1% year-over-year, beating expectations and recovering from a 1.7% decline in September, while imports rose 0.4%, slightly above forecasts but slower than the 2.1% growth in the previous month. Meanwhile, China's central bank kept its benchmark lending rates unchanged, following a rate cut in October.

CURRENCY MARKET COMMENTARY

The South African rand fell on Tuesday as investors shied away from riskier assets after Russian President Vladimir Putin updated nuclear policies amidst U.S.-Russia tensions over Ukraine. Meanwhile, the U.S. dollar slid to a one-week low, extending a three-day decline following its post-election rally. Bitcoin surged past $94,000, fuelled by reports of Donald Trump’s social media company exploring a deal to acquire crypto trading firm Bakkt, raising hopes for a crypto-friendly approach under his administration.

COMMODITY MARKET COMMENTARY

Gold prices rose for a second straight session on Tuesday, reaching a one-week high as heightened Russia-Ukraine tensions drove demand for safe-haven assets. Investors also awaited updates on the Federal Reserve's interest rate plans. Meanwhile, oil prices inched higher this morning, supported by escalating conflict in Ukraine and increased Chinese crude imports, though gains were tempered by rising U.S. crude stock levels.

Coronation Fund Managers (CML) +3.06%

For the year ending 30 September 2024, revenue rose 7% to R3.91 billion. Both headline and basic earnings per share jumped 245% to 630.5 cents. Fund management earnings per share, a key operating metric, climbed 273% to 617.1 cents, or 9% to 402.9 cents when excluding a SARS-related matter. Gross total dividends per share surged 243% to 566.0 cents.

Old Mutual (OMU) +0.31%

For the nine months ending 30 September 2024, key financial metrics showed positive trends. Life APE sales increased 6% to R10.41 billion, and gross flows surged 19% to R170.22 billion. Net client cash flow improved significantly, with outflows reduced to R557 million from R10.83 billion last year. Loans and advances remained steady at R19.38 billion, while gross written premiums rose 7% to R20.74 billion.

Lowe's Companies Inc. (LOW) -4.60%

Lowe’s reported better-than-expected third-quarter results, with same-store sales falling 1.1%, outperforming analysts' forecast of a 2.86% decline. Adjusted earnings were $2.89 per share, above the estimated $2.82. Sales were bolstered by hurricane-related demand, growth in the professional category, strong online sales, and smaller-ticket DIY projects. However, gross margins were slightly lower at 33.7%, influenced by low-margin storm-related sales. For 2024, Lowe’s expects same-store sales to decline between 3% and 3.5%, improving from its previous forecast of a 3.5% to 4% drop.

Walmart Inc. (WMT) +3.00%

Walmart raised its annual sales and profit forecasts for the third time, driven by strong grocery and merchandise sales, signalling robust holiday demand. With shares up 60% this year, the retailer reported gains across all income groups, especially households earning over $100,000. CEO Doug McMillon highlighted growing in-store, pickup, and delivery volumes. Walmart now projects fiscal 2025 sales growth of 4.8% to 5.1%, up from earlier estimates, as inflation trends downward and consumer spending rises.

QUALCOMM Inc. (QCOM) +0.13%

Qualcomm expressed confidence in President-elect Donald Trump's administration, citing a positive outlook on U.S.-China trade dynamics despite proposed tariffs. At an investor event in New York, the company projected $22 billion in revenue over five years from products beyond smartphones, including laptops and cars. Qualcomm highlighted its strong ties with Trump’s previous administration, which blocked Broadcom's takeover bid, and expects continued collaboration with the incoming team, particularly praising the anticipated appointment of Howard Lutnick as Commerce Secretary.

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