Jobless Claims, Walmart Q1 Stay Healthy (revised)

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Thursday, May 17, 2018

Initial Jobless Claims from last week were again released before the bell this Thursday, as they do every Thursday. And even though the week-over-week headline rose by 11,000 claims, the total of 222K is still within an historically very healthy range. For more than a year, we'd seen a strong labor market range for claims between 225-250K, but for the last month or so, we've actually been within a 200-225K range for new jobless claims.

This is, actually, quite an incredible number - especially considering from whence we came. For years following the Great Recession implosion, when the U.S. labor market was hemorrhaging more than a quarter-million jobs per MONTH, once traction toward jobs gains was established, claims were still sky-high. Here at Zacks, we looked forward to the day when, based on trajectories we were studying at the time, we could bring claims to the sub-300K range and stay there. Then we'd start to see real economic progress.

And look where we are now - historic jobless claims numbers. Continuing Claims have naturally followed suit, posting this morning another multi-year low at 1.707 million. Even though it hasn't been very long ago that we were seeing continuing claims totaling more than 2 million per week, those days also look well in the rear-view mirror these days.

Any self-styled economist could tell you that with jobless claims numbers like these - as well as a current unemployment rate below 4% for the first time in 20 years or so - consumer confidence was going to benefit, especially on the lower rungs of the pay scale (the super-wealthy never really have to worry about their purchasing power). Thus, we see an opportune moment for Walmart WMT Q1 2019 earnings results ahead of the opening bell, and the numbers were quite good.

Walmart's earnings pre-figure a one-time charge that is calculated to benefit the world's largest retailer, and that is the 77% stake in Flipkart the company took during the quarter. Flipkart is known as the Amazon of India, and as such looks to greatly expand Walmart's ecommerce presence on a worldwide scale. However, assuming the deal is finalized, the impact on WMT stock won't be felt til the company's Q2 earnings report.

The headline earnings figure of $1.14 beat the Zacks consensus by 2 cents. Revenues also surpassed expectations, putting up $122.7 billion as opposed to the $120 billion expected, and up 4.4% year over year.

Considering the strong U.S. consumer confidence a moment, U.S. sales rose more than 3% year over year. Ecommerce sales domestically rose 1% from the same quarter a year ago. Shares are up roughly 1.7% in today's pre-market; they are still off the all-time highs experienced earlier this year, but up around 3% over the past week. For more on WMT's earnings, click here.

Mark Vickery
Senior Editor

(NOTE: We are reissuing this article to correct a mistake. The original version, released earlier today, Thursday, May 17, 2018, should no longer be relied upon.)

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , US Markets , Stocks
Referenced Symbols: DIA , QQQ , SPY , WMT

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