2 Great Retail and E-commerce Stocks to Buy Before Earnings

Today’s episode of Full Court Finance at Zacks breaks down the market at the halfway point of February. The discussion then turns to two strong retail and e-commerce stocks—Shopify (SHOP) and Walmart (WMT)—to consider buying ahead of their upcoming quarterly financial releases due out during the week of February 14.

Stocks have fallen since January’s CPI data came out last Thursday morning to erase a good chunk of their recent rebound. The S&P 500 is up only 1.5% off its late January lows and is back below its 200-day moving average. Wall Street sold stocks after U.S. inflation officially climbed from 7% in December to 7.5% in January.

Inflation remained at 40-years highs last month. Luckily, the Fed is set to step in soon. St. Louis Fed President James Bullard said on CNBC Monday morning that he thinks the central bank needs to “front-load more of our planned removal of accommodation than we would have previously… Our credibility is on the line here and we do have to react to the data.”

Wall Street has clearly priced in a fair number of hikes in 2022, and the first official hike will hopefully provide more clarity. The 10-year U.S. Treasury is already above 2% for the first time since 2019. And it’s also worth noting that Bullard said the Fed can do what is needed in a “way that’s organized and not disruptive to markets.”

A ton of selling has already happened in 2022 and in the back-end of last year that’s helped tamp down out of control stock prices and valuations. There could, of course, be more selling and 2022 could be a tough year after three-straight periods of impressive returns.

Still, the uncertainty shouldn’t deter investors with long-term horizons. Shopify SHOP is set to release its fourth quarter fiscal 2021 financial results before the market opens on Wednesday, February 16.

Shopify was a Wall Street growth superstar for years before covid-19, as businesses turned to SHOP for all things e-commerce. SHOP provides what it calls “essential internet infrastructure for commerce,” including everything from site design and marketing to payments and shipping. Shopify shares are trading 50% beneath their November records after Wall Street began dumping all things growth.

The other strong retailer and e-commerce stock we looked at today was Walmart Inc. WMT, with WMT ready to release its fourth quarter fiscal 2022 earnings results before the market opens on Thursday. The pandemic helped Walmart post a blowout year in 2020 and its growth outlook for FY22 and FY23 have improved. Walmart is more diversified than ever and its stock is currently trading around where it was in the summer of 2020.

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