New Apple product seen, but no livestream keynote. (0:21) Walmart commentary on tariff impact expected. (0:48) Traders eye FOMC minutes. (2:21)Show NotesCiti’s ‘Thematic 30’ StocksOPEC+ delaying April production hike?Dividend RoundupEarnings CalendarEpisode transcripts: seekingalpha.com/wsb Sign up for our daily newsletter here and for full access to analyst ratings, stock quant scores, dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions.
Chapter 1: What are the highlights of Apple and Walmart this week?
Welcome to Seeking Alpha's Wall Street Brunch, our Sunday look-ahead to this week's market-moving events, along with the weekend's top news and analysis. Hello, today is Monday, February 17th, and I'm your host, Kim Kahn. This is a special President's Day edition of Wall Street Brunch. Focus will be stock-specific this holiday-shortened trading week, with the economic calendar relatively light.
Chapter 2: What can we expect from Apple's upcoming product launch?
Two big household names will draw special attention, Apple and Walmart. On Wednesday at noon ET, Apple will host a launch event. The announcement is expected to be conducted through a press release and promotional materials, rather than a live-streamed keynote.
A fourth-generation iPhone SE is widely expected to be featured, although there is speculation about a new MacBook Air, a new iPod Air, or a surprise reveal. Walmart reports fiscal Q4 earnings before the bell on Thursday, and investors will be anxious for any commentary about the impact of tariffs on China.
Chapter 3: How will tariffs impact Walmart's earnings?
According to SA analyst Jeffrey Fisher, Walmart concedes that a significant amount of merchandise is sourced internationally, but how much and from where? Several online sources offered varied estimates, but all of them suggest that products from China represented well more than 50% of the items on North American Walmart shelves. He estimates a hit on EPS could potentially boost Walmart's P.E.
above 100 times. Analysts are forecasting a quarterly EPS of $0.65 on sales of nearly $179 billion. Revisions have been bearish in the last 90 days, with 18 downward revisions to EPS numbers compared to 9 upward revisions. On the top line, there have been 11 upward revisions and 10 downward revisions.
Chapter 4: What are analysts predicting for Walmart's financial performance?
But Seeking Alpha Analyst Skeptical 2 says, Walmart should be able to accelerate earnings growth with increased share buybacks as cash flow continues to grow, and the company should continue to drive impressive growth regardless of economic cycles in what is likely to remain a favorable operating environment moving forward.
Existing earnings estimates are likely low as well, since management has also consistently guided conservatively. Also on the earnings calendar, UFP Industries, Noble, and Transocean report on Monday. On Tuesday, Arista Networks, Medtronic, Cadence Design Systems, Occidental Petroleum, and Vulcan Materials issue numbers. HSBC Holdings, Analog Devices, Carvana, and Garmin weigh in on Wednesday.
Chapter 5: What other companies are reporting earnings this week?
Joining Walmart on Thursday are Alibaba, Booking Holdings, MercadoLibre, and Southern. On the economic front, the minutes from the last FOMC meeting arrive on Wednesday afternoon. According to veteran Fed watcher Mott Capital, who runs the Reading the Markets investing group, most of the recent data point to a strong labor market and inflation rates that appear to be accelerating.
Chapter 6: How might the FOMC minutes influence the market?
The market is taking notice as one-year and two-year inflation swaps trade at their highest levels since March 2023. The Fed minutes are likely to read moderately hawkish and carry the tone of the January press conference, Mott Capital said.
The overall tone should indicate that the Fed wants to see more progress on inflation, but at the same time send a message that the Fed believes the policy is restrictive. However, the data do not support that, nor do financial conditions.
If that is the message of the minutes, it should lead to the bond market bear steepening resuming as rates on the long end of the yield curve continue to push higher. Morgan Stanley economists say that Chairman Jay Powell's testimony in mid-February gave a more timely update on Fed thinking than the minutes will.
Even so, we'll look for assessments of recent disinflation, of potential effects from tariffs and policy uncertainty, and the restrictiveness of current policy. Fed officials' view on these differ, and the minutes may offer information about the distribution of their thinking, they said.
In the news this long weekend, OPEC Plus is weighing yet another delay to its plan to unwind voluntary production cuts and resume monthly supply hikes from April, according to Bloomberg. If it decides to push back the move, it'd be the fourth time that the Saudi Arabia-led oil-producing alliance has delayed plans to restart production hikes since 2022.
While a decision will likely be finalized in the coming weeks, the group is split on how to proceed. A delegate cited in the report said global oil markets continue to be too fragile to restart production.
Tencent shares rose to their highest level since 2021 on Monday after the company said its WeChat messaging app has launched beta testing with DeepSeek, joining a growing list of big tech majors integrating DeepSeek's AI software across China.
And Captain America Brave New World became the first big box office opening of the year, bringing in $88.5 million, according to studio estimates released Sunday. Sony's Paddington in Peru came in second with $13 million. The film opened in the UK in early November. Horror movie Heart Eyes came in third with $10 million during its second weekend.
Dogman came in fourth, and Chinese film Nezha 2 came in fifth. For income investors, Ford and Johnson & Johnson go ex-dividend on Tuesday, Ford pays out on March 3rd, and J&J pays out on March 4th. Microsoft goes ex-dividend on Thursday, paying out on March 30th, and Yum! Brands goes ex-dividend on Friday, with a payout date of March 7th.
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