Good morning investors! The market appears confused as global tensions continue to rise.
Today we cover:
Trump gives Iran ultimatum
Walmart announces earnings
Palantir in trouble?
📊 Economy and News
Trump Gives Iran Ultimatum: Deal or Strike in Coming Days
The Trump administration is pressuring Iran to reach a nuclear deal quickly, warning that Tehran would be "very wise" to negotiate amid reports of potential U.S. military strikes as early as this weekend or within the next 10 days.
White House Press Secretary Karoline Leavitt emphasized diplomacy as President Trump's preferred path but noted the two sides remain "very far apart" on key issues, despite some progress in Geneva talks where envoys discussed guiding principles.
Trump stated Thursday he will decide on military action "over the next probably 10 days," saying, "Maybe we’re going to make a deal... otherwise bad things happen."
Tensions have risen with U.S. reinforcements—including the USS Abraham Lincoln carrier in the region and the USS Gerald R. Ford en route—plus Iranian drills in the Strait of Hormuz and joint naval exercises with Russia in the Sea of Oman.
Analysts call the situation "extremely dangerous," with risks of conflict disrupting global oil flows through this key chokepoint (handling ~31% of seaborne crude in 2025).
Oil prices climbed Thursday, with Brent crude up ~1.5-2% to around $71-72 per barrel and WTI up to ~$66-67, extending gains on fears of supply disruptions. Traders are watching closely for any escalation.
Global hits:
IMF maintains China’s growth forecast at 4.5% for 2026.
Canada’s trade deficit narrows in December, share of exports to U.S. shrinks further.
Brazil’s economic activity expands 2.5% in 2025 as agriculture cushions slowdown.
BOJ to hike policy rate to 1% by end-June, sooner than forecast before election.
Look here: U.S. renews threat to quit the International Energy Agency over net zero agenda.
Chinese tech companies progress ‘remarkable,’ says OpenAI’s Altman.
Reminder: US unsecured loan balances hit record high on demand from subprime customers. In other news, U.S. trade deficit totaled $901 billion in 2025, barely budging despite tariffs.
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📈 Stocks
S&P 500 6,861.89 (-0.28%)
DJIA 49,395.16 (-0.54%)
NASDAQ 22,682.73 (-0.31%)
BRENT CRUDE 71.64 (+1.87%)
* Prices as of Feb 20th, 12:20 AM UTC
Walmart Announces Earnings
Walmart beat fourth-quarter earnings and revenue estimates, but its fiscal 2027 earnings guidance fell short of Wall Street expectations. This marks the first earnings report under new CEO John Furner, who took over on February 1, 2026.
The company reported strong e-commerce growth, with U.S. online sales up 27% year-over-year—driven by store-fulfilled pickup/delivery and its third-party marketplace—marking its 15th consecutive quarter of double-digit digital gains. Global e-commerce rose 24%, and U.S. e-commerce now accounts for a record 23% of sales. Gains were especially strong among higher-income consumers, though market share increased across all income levels (per CFO John David Rainey).
Walmart also authorized a new $30 billion share repurchase program, replacing the prior $20 billion authorization from 2022.
Interesting: Accenture tells senior staff to use AI tools or risk losing out on leadership promotions.
Amazon surpasses Walmart in annual revenue for first time, as both chase AI-fueled growth.
Surprising: Apple sued by West Virginia for alleged failure to stop child sexual abuse material on iCloud, iOS devices. In other news, New York Gov. Hochul drops robotaxi service proposal for outside NYC in blow to Waymo.
Palantir in trouble: Michael Burry has published a detailed critique—"forensic audit"—of Palantir's latest 10-K, accusing the company of aggressive revenue recognition and channel stuffing. He argues Palantir is essentially a consulting firm masquerading as a software company, which fueled its peak valuation at ~1000x forward revenue.
Key allegations:
Accounts receivable grew faster than revenue in 9 of the last 12 quarters, indicating sales booked ahead of cash collection—unlike typical SaaS predictability.
Uneven revenue patterns suggest custom (consulting-like) work rather than recurring software subscriptions.
Labor costs for "forward-deployed engineers" are allegedly miscategorized to inflate gross margins.
He mocked $17.2M in jet reimbursements to CEO Alex Karp as "billionaire-to-sales."
Burry, who first disclosed his Palantir short (via ~50,000 put contracts, or ~5M shares notional) in late 2025, remains bearish. He sees a potential drop to $50–$60. PLTR trades at ~100x forward earnings (5x S&P 500 average), with adjusted margins that he claims would crater under consulting-style accounting (e.g., like Accenture).
💵 Personal Finance
Are Dividends the Perfect Retirement Income? Weighing the Evidence
Dividends appeal to retirees because they promise steady cash flow without selling shares. But are they truly ideal, or just one tool among many?
The Strong Case for Dividends
Dividend-paying stocks historically deliver 2–4% yields plus growth. The income feels “safe” because companies only cut dividends in genuine distress. Blue-chip dividend aristocrats (companies raising payouts for 25+ years) have survived recessions and inflation. Retirees can live off the dividends while the principal continues growing, creating a sustainable income stream that often beats bond yields.
Tax Advantages and Simplicity
Qualified dividends are taxed at long-term capital-gains rates—usually 0%, 15%, or 20%—far lower than ordinary income. In taxable accounts, this creates efficient cash flow. Many retirees appreciate the psychological comfort of receiving monthly or quarterly checks without touching their nest egg.
Potential Downsides and Risks
High-dividend stocks are often in mature, slower-growth sectors (utilities, energy, REITs). When interest rates rise, these stocks can fall sharply as investors chase safer yields elsewhere. Dividend cuts during crises—like 2008 or 2020—can devastate income exactly when retirees need stability most. Over-concentration in dividend stocks also reduces diversification.
Inflation Erosion
A 3% yield sounds great until 3–4% annual inflation quietly reduces purchasing power. Only companies that consistently raise dividends keep pace. Many high-yield traps (yields above 6–7%) signal troubled businesses likely to cut payouts soon.
Better Strategies for Today’s Retirees
Smart planners blend dividends with a total-return approach: sell shares systematically when needed, use bond ladders, and include growth stocks for inflation protection. The “dividend portfolio only” strategy worked well in the low-rate 2010s but looks riskier in a higher-rate environment. Target a 50–70% allocation to dividend payers within a broader, globally diversified portfolio.
Final Verdict
Dividends are excellent for retirees seeking reliable income and emotional comfort, but they should not be the entire plan. Used wisely within a balanced portfolio, they reduce sequence-of-returns risk and provide sleep-at-night income. Relying on them exclusively, however, can leave retirees vulnerable to sector slumps and inflation.
The best retirement income is diversified income. Dividends deserve a prominent seat at the table—just not the only seat.
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