Wall Street investors are expecting that a slew of quarterly results from the United States, notably those from mega cap growth companies, will reinforce corporate America’s strong profit projections and support the case for stocks following a difficult start to the year.

U.S. stock investors, concerned that geopolitical instability and the Federal Reserve’s fight against inflation could stifle economic development, are flocking to defensive sectors, which they believe can better weather storms and pay high dividends.

Even though the broader market has slid, the healthcare, utilities, consumer staples, and real estate sectors have all seen gains in April, following a trend that has seen them outperform the S&P 500 this year.

The recent round of earnings comes against a backdrop of Fed hawkishness and a rapid rise in bond yields, raising concerns about whether policymakers will harm the economy in their efforts to combat the worst inflation in nearly four decades. After a violent selloff on Friday, the S&P 500 fell in April and is now down 10.4% for the year.

Bullish investors are banking on a strong corporate outlook to underpin markets as monetary policy weighs on stocks, increasing pressure on firms to post strong bottom-line earnings and predictions. According to Refinitiv IBES, S&P 500 companies are expected to grow earnings by 9% this year.

Investors have wasted no time in punishing shares of businesses with meagre outcomes so far, particularly those with high valuations.  Netflix  was one of the most recent casualties, with its stock dropping about 35% in a single session after the streaming giant revealed its first loss in members in a decade.

Investors will focus on  Apple,  Microsoft,  Amazon, and  Alphabet, which together have a market capitalization of $8 trillion and account for one-fifth of the S&P 500’s weight. The Big Four have all decreased this year, with Apple down approximately 9%, Amazon down 13.4%, Alphabet down 17.4%, and Microsoft down 18.5%.

For the quarter ending in March, earnings projections for these firms are low. According to Refinitiv statistics,  Microsoft  is estimated to have raised adjusted earnings per share by 12% over the prior year, Apple by 2%, Alphabet by 0.7%, and Amazon by 49%. The S&P 500 is forecast to boost quarterly earnings by 7.3% on average.

Apart from the top four businesses,  Meta Platforms, Visa and  Mastercard, oil heavyweights  Chevron  and  Exxon Mobil, and consumer corporations  Coca-Cola  and  Pepsico  are all expected to report results next week.

Investors will be looking for companies to retain profit margins as inflation threatens to drive up their input costs, in addition to the bottom-line performance and financial outlooks.  JPMorgan  predicted in a note this week that net income margins for S&P 500 corporations should fall to around 13% in 2022, down from a record 13.4% last year.

(Photo/Credit:Chaay_Tee)

Walmart remains in the forefront of innovation and expansion. Its latest move to please its customers and get new ones has been to partner with a popular designer duo, Dave and Jenny Marrs. They are well known as they appear on home-remodeling shows featured on HGTV.

Walmart’s furniture collection now includes a porch swing and a dining table from the star couple’s collection. In an interview with Bloomberg, Julie Barber, who is a senior vice president at the big box retailer, said that the nation’s largest retailer was planning to add indoor furniture, at the earliest.

Barber also said that the partnership was a part of Walmart’s thrust towards “stylish and chic” merchandise. It is a move forward as its customers were looking for such furniture. She added that the retailer was looking at an assortment of furniture and other items that would be of “higher quality” in both home goods and decor.

Walmart has always looked to be a “one-stop shop” for its customers and this was the reason why they were strategically upgrading categories that included “sporting goods, hardware, automotive, paint and outdoor living.”

Walmart is looking to boost its decor credentials with a new outdoor furniture line backed by Dave and Jenny Marrs, a builder-designer duo known for their home-remodeling shows on HGTV https://t.co/OJfUcM16Wd

— Bloomberg (@business) April 25, 2022

 

Walmart has been working towards improving its home department by adding new items, some of which are more upscale than its earlier offerings. Its home department is lucrative to its bottom line as it generates a wider profit margin than its core food business.

The home department, however, does not see huge demand like its food business. This is because the home department has been viewed as one that offered limited choices and was perceived to offer merchandise of low quality.

In the past few years, Walmart has been working to change that perception as it adds a wider rage of merchandise available from a variety of sellers who offer items at different rates, including high end items. The retailer has added a dedicated landing page for furniture and decor items that are upscale. Adding items from the popular builder-designer duo Dave and Jenny Marrs is one more step forward for the largest retailer and employer in the world; to increase access to a wider number and range of items for its customers.