🏬 Walmart impresses

and homebuilding dips

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Good morning investors! Investors appear scared due to increasing tension between Russia and Ukraine as they prepare for Nvidia’s report today and BTC crosses $94,000.

Today we cover:

  • Homebuilding dips.

  • Walmart impresses yet again.

  • How bad credit can impact your life.

📊 Economy and News 

U.S. Homebuilding Dips Amid Hurricanes and High Rates

Single-family homebuilding in the U.S. fell sharply in October, largely due to Hurricanes Helene and Milton disrupting activity in the South. According to the Commerce Department, single-family housing starts dropped 6.9% to an annual rate of 970,000 units, while September figures were revised upward to 1.042 million units. Starts in the South plunged 10.2%.

Permits for future construction edged up 0.5% to 968,000 units, hinting at a restrained recovery. Despite earlier gains following a dip in mortgage rates, the rebound has been hampered by limited housing supply, hurricane damage, and persistent borrowing costs.

Higher mortgage rates, tied to a rising 10-year Treasury yield, continue to weigh on the market. While builder sentiment improved in November, optimism was driven by expectations of regulatory relief under Republican leadership rather than immediate market conditions.

Global hits:

Global cuts: Bank of Mexico flags more rate cuts due to progress on lowering inflation. Whereas, Bank of England to cut rates gradually as the world braces for Trump's tariffs: Reuters poll. Lastly, BoE's Taylor says 4 rate cuts by end of 2025 would be gradual.

Exciting: Germany’s Thyssenkrupp pops 10% after narrowing net loss and booking $1 billion impairment charge. Elsewhere, CVS, UnitedHealth, Cigna sue to block FTC case over insulin prices.

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📈 Stocks

S&P 500 5,916.98 (+0.40%)
DJIA 43,268.94 (-0.28%)
NASDAQ 18,987.47 (+1.04%)
BRENT CRUDE 73.35 (-0.01%)
* Prices as of Nov 20th, 12:20 AM UTC

Walmart impresses and leaves some important comments

Walmart upgraded its full-year net sales growth forecast to a range of 4.8% to 5.1%, up from its previous estimate of 3.75% to 4.75%. The revised outlook follows strong third-quarter performance, with earnings and revenue surpassing Wall Street expectations. Walmart reported earnings per share of 58 cents (adjusted) versus 53 cents expected, and revenue of $169.59 billion, exceeding the projected $167.72 billion.

Record-High Stock Performance
The better-than-expected results sent Walmart shares up by 3%, reaching a 52-week high and an all-time intraday peak since the company began trading on the NYSE in 1972.

Quarterly Financial Highlights
For the quarter ending October 31, Walmart’s net income surged to $4.58 billion, or 57 cents per share, from $453 million, or 6 cents per share, a year earlier. Revenue climbed from $160.80 billion during the same period last year. Comparable sales rose 5.3% at Walmart and 7% at Sam’s Club, excluding fuel, reflecting strong consumer activity.

E-Commerce and Delivery Drive Growth
U.S. e-commerce sales grew 22%, fueled by curbside pickup, home delivery, and expansions in Walmart’s advertising and third-party marketplace businesses. Customers increasingly paid additional fees for expedited delivery options, with 30% of U.S. orders including these services over the last two quarters. CFO John David Rainey noted this has brought Walmart’s e-commerce segment closer to profitability.

Economic Challenges Ahead
While Walmart continues to thrive, the retailer faces potential headwinds from new tariffs on imports proposed by President-elect Donald Trump. These could lead to higher costs and inflation. Walmart has expressed concerns about price increases, echoing sentiments from other retailers like Lowe’s, which is in discussions with suppliers about mitigating tariff-related risks.

Lowe’s beats: Lowe’s topped third-quarter earnings and revenue estimates. The home improvement retailer raised its outlook, but still expects full-year sales to decline from the prior year. Lowe’s rival Home Depot has said customers are deferring big projects even after the Federal Reserve cut interest rates.

Super Micro steps up: Super Micro said on Monday that it hired BDO as its independent auditor. The stock, which as cratered since peaking in March, rose about 30% as a result. The company said that it will remain listed on the Nasdaq pending the exchange’s “review of the compliance plan.”

Good to know: Stellantis is delaying the launch of its Ram all-electric pickup truck from this year until the first half of 2025. And, Qualcomm says it expects $4 billion in PC chip sales by 2029, as company gets traction beyond smartphones.

💵 Personal Finance

Why you should worry if you have a bad credit score

A bad credit score can have a huge impact on your life. Here’s how it can affect an individual:

  • Loans will be more expensive with the interest rate on credit cards often going above 30% for people with a poor credit score. This applies to almost all types of loans, including mortgages, auto loans, and more. Look at the current scenario. In this situation, an applicant with a score of 620 will pay about 4.8% in interest for a $300K house, whereas someone with a score of 760 or higher will pay only 3.2%.

  • You’ll have fewer mortgage and credit card options since some companies only work with people with a good credit score. In fact, Experian says that 620 is the typical requirement to qualify for a mortgage.

  • You might see higher insurance premiums since insurance companies take this factor into consideration when giving a quote.

  • It can be hard to convince landlords since most are known for running credit checks. They can see your credit report, not your specific credit score. Most look at the payment history portion of a credit report to find potential problem areas. For example, they can see if you have been evicted in the past.

  • This might come as a surprise but finding a job can be difficult if you have a poor credit score. Some employers look at the credit score when gauging potential candidates. Applicants with a bad credit history are considered unreliable.

  • Utility providers pay special attention to the credit score and may ask for a deposit if you have a poor credit history. The law says that utility companies can ask for deposits from all customers, but some may waive it if a customer has a good credit score. Similarly, in some cases, a letter of guarantee, which is defined as a promise by a third-person to pay if you default, may suffice.

Check this interesting video on the topic:

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.