Walmart posted a very strong performance in the second quarter, with sales surging by 9.3% on a same-store basis, driven by purchases related to the lockdown period, and by its e-commerce activities, which have almost doubled (+97%) in one year.

Sales amounted to $137.74 billion in the quarter, higher than the consensus of $135.48 billion, which expected a 5.4% increase in same-store sales. Adjusted earnings per share came to $1.56, compared with $1.25 anticipated.

Meanwhile, Home Depot saw a 25% jump in same-store sales in the second quarter and a profit per share of $4.02, better than the $3.71 expected. These figures reassured investors, as they indicate that consumer demand has not yet been affected by inflation.

However, indexes are still in a consolidation phase at high levels after having exhausted many of the bullish catalysts. Financial markets thus recorded another hesitant session yesterday, with the red dominating. After its rebound, the US technology sector gave up some ground, with sharp declines for traditional cable operators, shaken by the creation of a new streaming giant.

AT&T gave up its dreams of convergence when it spun off Time Warner, three years after battling to buy the media group. It's Discovery, inc that will pick up the assets, based on a valuation half the $80B paid in 2018. AT&T is a new victim of the fantasy of convergence between telecoms and content, so attractive on paper but clearly not working.

We also learnt that Amazon.com would be ready to pay $9 billion to buy Metro-Goldwyn-Meyer, according to indiscretions obtained by Variety and other specialized media. The group, already ultra-dominant in e-commerce and web hosting, also has high ambitions it has for its Amazon Prime platform.

 

Economic highlights of the day:

British monthly employment figures, the European trade balance for March and statistics on housing starts and building permits for April in the United States are being published today. Japan announced a slightly stronger than expected GDP contraction in the first quarter of 2021.

The dollar is trading at EUR 0.8185. The ounce of gold is solid at USD 1869. Oil is gaining some ground at USD 69.90 per barrel of Brent and USD 66.50 per barrel of WTI. U.S. debt is yielding 1.64% over 10 years. Bitcoin is back under USD 45,000

 

On markets:

* Macy’s - The department store group is up 5.6 percent in pre-opening trading after raising its annual revenue and profit forecasts.

* Amazon.com is in talks to buy Hollywood studio MGM, The Information reported Monday, citing a person close to the matter. In addition, the German competition authority has opened new proceedings against the group to try to determine whether it has a dominant position.

* Tesla- The investment firm of Michael Burry, the short-seller made famous by the movie "The Big Short", announced that at the end of March it held a short position in Tesla worth $534 million (437 million euros). The stock was down as much as 4.8% in after-hours trading Monday night.

* AT&T lost 3.4% in pre-opening trading, still hurt by the prospect of a dividend cut after the Discovery deal on its media business.

* Tencent Music Entertainment reported a better-than-expected quarterly profit and a 24% increase in revenue, driven by subscriber and advertising revenue growth.

* Baidu reported Tuesday a quarterly revenue increase of 25% and above consensus, thanks to growth in its cloud computing and artificial intelligence businesses. The stock is up 3.4% in pre-market trading.

 

Analyst recommendations:

  • Barclays: Jefferies remains Buy with a price target raised from GBp 296 to GBp 300.
  • Blue Prism: Jefferies remains Buy with a price target reduced from GBp 1,890 to GBp 1,500.
  • Compass: Berenberg remains long with a target raised from GBp 1700 to GBp 1800.
  • Diploma: Jefferies remains a hold with a target price raised from £2,300 to £2,800.
  • Ford Motor : Tudor Pickering initiates coverage of Ford Motor with Buy rating, $17 Price Target
  • London Stock Exchange: Morgan Stanley reiterates Overweight rating at GBp 8945.
  • Lloyds Banking : Redburn upgrades to Neutral From Sell
  • Microsoft Corp: Jefferies has Buy rating. The target price is decreased from USD 300 to USD 290.
  • Oracle Corp: Initially Neutral on the company, Jefferies maintained its recommendation. The target price is reviewed upwards from USD 65 to USD 75.
  • Royal Dutch Shell : Mizuho Securities raises PT on Class A Shares to $61 From $56, keeps Buy rating
  • Ryanair: Credit Suisse remains Outperform with a target price raised from EUR 17.91 to EUR 18.65.
  • Salesforce: Jefferies advises its customers to buy the stock. The target price is lowered from USD 320 to USD 300.
  • Shake Shack : Goldman Sachs lowers price to $107 From $114, stays Neutral 
  • Vodafone: Jefferies retains a Buy rating. The target price remains unchanged at GBp 160.
  • Unilever PLC: Bernstein  reiterate its Sell rating on the stock. The target price continues to be set at GBp 3500.
  • Vistry: Liberum remains Buy with target raised from GBp 1490 to GBp 1530.