Morning Note: Walmart’s Q4 Results, Rising Jobless Claims, and Canada’s PPI Surge

Investors Eye the Retail Giant's Quarterly Report

Walmart (WMT) is set to provide valuable insights into consumer shopping trends when it releases its Q4 results on Thursday, February 20, at 12:00 GMT. The retail giant’s fourth-quarter sales for 2024 are projected to have risen by 3% year over year to about $179.18 billion. The Q4 EPS is expected to rise 6% to $0.64 on the earnings front. Impressively, Walmart has met or exceeded earnings expectations for 10 consecutive quarters, delivering an average EPS surprise of 9.25% over the past four reports.

Although inflationary pressures have eased following multiple rate cuts in 2024, Walmart has kept its competitive edge over Target, as the latter tends to offer premium items priced higher. Furthermore, Walmart’s continuing online expansion has strengthened its position against e-commerce giant Amazon.

(Walmart Stocks Weekly Price Chart, Trading View)

From a technical analysis perspective, the overall trend of Walmart's share price remains bullish, as indicated by higher highs and higher lows within the ascending channel. The price has broken above the previous high level with strong bullish momentum, marked by consecutive closed bullish candles, establishing another higher high.

However, the price is currently approaching the upper boundary of the ascending channel. If it fails to break above this boundary, a downward move toward retesting the swap zone may occur. Conversely, a successful breakout above the channel could push the price even higher.

Will the Upcoming Jobless Claims Report Deliver a Surprise?

According to a report from the U.S. Department of Labor last week, the initial jobless claims hit a level of 213,000, while today’s release at GMT 13:30 is forecasted to rise to 220,000. The expected rise could encompass seasonal factors such as post-Christmas adjustments and potential layoffs in the retail and seasonal industries. It could well suggest cooling the labour market amid broader economic uncertainties.

(U.S. Dollar Index Daily Chart, Source: Trading View)

From a technical analysis perspective, the overall trend of the U.S. dollar index has been moving in a bullish trend since the end of October, as indicated by the higher highs and higher lows. Currently, the price is hovering around a support zone. If the price finds support here, it is likely to surge upwards to retest the previously broken swap zone. Conversely, if this support zone fails to hold, the price may decline further, retesting the order block below.

Canada PPI is Expected to Rise

As of December 2024, Canada's Producer Price Index (PPI) increased by 0.2% month-over-month and 4.1% year-over-year. Canada’s upcoming Producer Price Index (PPI), set to be released at 13:30 GMT today, is expected to show a 0.4% month-over-month rise and a 4.3% year-over-year increase. These forecasts reflect the influence of a weaker Canadian dollar, which raises the cost of imported goods and persistent strength in commodity prices, particularly in lumber, wood products, and energy.

(USD/CAD Daily Chart, Source: Trading View)

From a technical analysis perspective, the price action has recently broken below the oscillation zone, with significant bearish momentum driving the price downward. It is now moving between the oscillation zone and the support zone below. The price is highly likely to retest the oscillation zone before establishing a clearer trend. If the price fails to close within the oscillation zone in the near term, bearish momentum may dominate, pushing the price further down to retest the support zone below.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.