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Yahoo
16 minutes ago
- Yahoo
Powell's Jackson Hole speech, Walmart earnings: What to watch this week
The investing world will turn its attention to northwestern Wyoming in the week ahead, with Federal Reserve Chair Jerome Powell set to give his most important policy speech of the year on Friday at the annual Jackson Hole Economic Symposium. Held each year at the Jackson Lake Lodge in Grand Teton National Park, the Kansas City Fed's annual meeting often serves as a crucial set piece in the Fed chair's calendar that signals key shifts in the central bank's thinking. Ahead of Powell's speech — likely to be his last as Fed chair — markets are placing the probability the Fed will cut rates by at least 0.25% next month at around 85%. Clues from Powell about the speed and depth of the cycle the Fed is about to embark on will be the week's biggest market-moving event. On the corporate calendar, results from Walmart (WMT), Target (TGT), and Home Depot (HD) highlight a slowing earnings schedule that sees the retail sector remain the key focus. And the economic data flow will be slow this week, with Thursday's updates on initial jobless claims and service sector activity the top highlights. Investors may also keep a closer eye than usual on the minutes from the Fed's July 30-31 meeting released Wednesday, which could offer more color on the decision from Fed governors Waller and Bowman to vote against the central bank's decision to keep rates unchanged in a range of 4.25%-4.50% last month. One more for the road In 2018, Jerome Powell addressed the Jackson Hole symposium for the first time as Fed chair, outlining his views on the key variables that central bankers wrestle with, elucidating his non-economist's view on the most technical aspects of monetary policy. In the intervening seven years, Powell has proven himself to be more of a pragmatist than a theoretician as he navigated 2018's false start on rate hikes, the COVID pandemic, the 2022 inflation shock, and the still-incomplete rate-cutting cycle that kicked off over a year ago. "The time has come for policy to adjust," Powell said last August. Rate cuts from the Fed in September, November, and December of last year have been on pause since. Growing dissent among his colleagues on the FOMC — and months of more forceful commentary from the White House — has seen Powell end up right where he stood a year ago. In his 2018 speech, Powell spoke at length about Alan Greenspan's decisions in the mid-90s to hold off on rate hikes, lauding the former Fed chair's "wait and see" approach and foretelling a preference to wait that has defined much of Powell's tenure. "Given what the economy has shown us over the past 15 years, the need for the sort of risk‑management approach that originated in the new-economy era is clearer than ever before," Powell said at the time. Barring the Fed's quick actions in March 2020, this line explains much of Powell's approach. As Powell gets set to end his time leading the Fed, the president has bestowed on him a nickname: "Too Late." "The diversity of views on the FOMC is one of the great virtues of our system," Powell said. "Despite differing views on these questions and others, we have a long institutional tradition of finding common ground in coalescing around a policy stance." In a year, a new Fed chair will address the crowd at Jackson Hole. Interest rates will likely be lower. But how this new chair views these tenets of central banking will be the more important answer for the future of the Federal Reserve. Retail's tale Retail sales rose 0.5% in July following a 0.9% jump in June. Economic data indicates US consumer spending has stabilizedafter tariff-related surprises this spring. How this information comes through in earnings reports scheduled for the week ahead will be one of the week's defining themes. Walmart's results Thursday morning, given the retailer's sheer size, will offer the broadest canvas for investors to work from. The company said in May that consumers remained "choiceful," with the company seeing growth across all income cohorts. Three months later, any signs of more confident spending will be welcomed by investors. Wall Street expects its US same-store sales rose 4% in its fiscal second quarter, according to Bloomberg data. In its fiscal first quarter, same-store sales rose 4.5% in the US. Walmart stock has gained over 10% this year, outperforming the S&P 500 by roughly a percentage point. At Target, questions over the company's leadership loom with shares of the retailer down over 20% this year. Home Depot, meanwhile, is navigating a US housing market some commentators have said is in recession, though interest rates have pointed to potential signs of a thaw in the coming months. Single-stock stories always stand at the ready to push around markets. Earnings from Nvidia on Aug. 27 will be another in this genre. But last week's market action showed investors starting to move past the daily headlines in an indication of a market finding firmer footing. "The bull market for stocks continued this week, and we've even seen some rotation out of the year's biggest winners into beaten down laggards like Health Care and homebuilders," Bespoke Investment Group wrote in its weekly letter to clients. "When momentum names stall or sell-off, it can really hit the major indices hard if no other areas of the market are there to pick up the slack, but this week, the year's worst performers finally saw some buying interest as investors rotated across the market instead of out of it." Like most things in modern life, the stock market story remains defined by easily digestible ideas like "Sell America" or acronymic memes like TACO. But the S&P 500 hit a record high this week. Twice. The absence of euphoric feelings from the investor class is another way to stamp this rally with a clean bill of health. And while the market has been driven by Big Tech and the AI trade, this week's market rotation shows investors acting on another one of the society's defining themes in 2025 — everybody gets a turn. Economic and earnings calendar Monday Economic data: NAHB homebuilder sentiment, August (34 expected, 33 previously) Earnings: Palo Alto Networks (PANW), Blink Charging (BLNK) Tuesday Economic data: Housing starts, July (-2.4% expected, +4.6% previously); Building permits, July (-0.2% expected, -0.1% previously) Earnings: Home Depot (HD), XPeng (XPEV), Medtronic (MDT), Amer Sports (AS), Toll Brothers (TOL), La-Z-Boy (LZB) Wednesday Economic data: FOMC Minutes, July 30-31 meeting; MBA weekly mortgage applications (+10.9% previously) Earnings: Target (TGT), Baidu (BIDU), Lowe's (LOW), TJX Companies (TJX), Estée Lauder (EL) Thursday Economic data: Initial jobless claims, week of Aug. 16 (224,000 previously); S&P Global US manufacturing PMI, August preliminary (49.8 previously); S&P Global US services PMI, August preliminary (55.7 previously); Existing home sales, July (-0.8% expected, -2.7% previously) Earnings: Walmart (WMT), Intuit (INTU), Workday (WDAY), Ross Stores (ROST), Zoom (ZM) Friday Economic data: Federal Reserve Chair Jerome Powell speaks at the Jackson Hole Economic Symposium Earnings: BJ's Wholesale (BJ), Buckle (BKE) Click here for in-depth analysis of the latest stock market news and events moving stock prices
Yahoo
an hour ago
- Yahoo
Elevance Health (NYSE:ELV) Is Reinvesting At Lower Rates Of Return
If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. Having said that, from a first glance at Elevance Health (NYSE:ELV) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. What Is Return On Capital Employed (ROCE)? For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. To calculate this metric for Elevance Health, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.11 = US$8.7b ÷ (US$122b - US$44b) (Based on the trailing twelve months to June 2025). So, Elevance Health has an ROCE of 11%. By itself that's a normal return on capital and it's in line with the industry's average returns of 11%. See our latest analysis for Elevance Health In the above chart we have measured Elevance Health's prior ROCE against its prior performance, but the future is arguably more important. If you'd like, you can check out the forecasts from the analysts covering Elevance Health for free. What Does the ROCE Trend For Elevance Health Tell Us? In terms of Elevance Health's historical ROCE movements, the trend isn't fantastic. Around five years ago the returns on capital were 14%, but since then they've fallen to 11%. Although, given both revenue and the amount of assets employed in the business have increased, it could suggest the company is investing in growth, and the extra capital has led to a short-term reduction in ROCE. And if the increased capital generates additional returns, the business, and thus shareholders, will benefit in the long run. The Bottom Line While returns have fallen for Elevance Health in recent times, we're encouraged to see that sales are growing and that the business is reinvesting in its operations. These trends are starting to be recognized by investors since the stock has delivered a 16% gain to shareholders who've held over the last five years. Therefore we'd recommend looking further into this stock to confirm if it has the makings of a good investment. Elevance Health could be trading at an attractive price in other respects, so you might find our on our platform quite valuable. For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Axios
an hour ago
- Axios
America starts to feel the squeeze: What we know about tariffs and inflation
Consumers and businesses are feeling the pinch from President Trump's trade war, with costs soaring for grocery staples and critical materials. Why it matters: It's no longer anecdotal. The effects are difficult to ignore across key inflation indicators that might only get hotter in the months ahead. The big picture: Global tariffs are putting upward pressure on costs. U.S. businesses are bearing the brunt, contrary to White House hopes that foreign suppliers would take some of the hit. Between the lines: Import prices might cool if exporters around the globe were discounting goods to help ease the tariff burden for their U.S. buyers. But the opposite was the case last month: Import prices rose at the quickest pace this year, "casting further doubt on the 'foreigners will pay' talk from the administration," ING global economist James Knightley wrote this week. Threat level: Wholesale prices rose at the fastest pace in three years last month — higher costs that might be passed on to the consumer down the line. The data "points to pipeline inflation that's likely to spill into consumer prices in the months ahead," says Michelle Green, a former Labor Department economist, now at corporate planning firm Board. Fresh and dry vegetable prices rose by almost 40 percent alone last month, the largest spike since inflation took off in 2022. The intrigue: Mexico is a leading supplier of America's vegetables, imports now subject to 25% tariff rates — at least until the end of October.. The Trump administration exempted U.S.-bound goods covered under the U.S.-Canada-Mexico trade agreement from tariffs, though the Trump 1.0-era deal largely does not apply to agricultural goods. The Consumer Price Index this week showed evidence of some tariff-related price hikes, though less so than was evident in June. The latest: Chicago Fed President Austan Goolsbee warned this week that a wave of new tariff announcements for inputs, like semiconductors, as well as final goods could keep upward pressure on inflation. That would be a more bleak outcome than the one-and-done price hike some, including White House economists, predict. "I just want some more surety that that's not going to be a persistent inflation shock," Goolsbee said. Of note: Customs and Border Protection said late Friday that 50% steel and aluminum tariffs would be expanded to more than 400 other goods, effective Monday. What to watch: Persistent inflation could derail a series of interest rate cuts later this year expected by financial markets and demanded by Trump.
