The stock market is a strange animal—sometimes ridden with anxiety over minor matters, yet at other times cold and soulless when confronted with tragic events.
In the wake of the Paris bombings, the Dow jumped 238 points Monday. What were traders applauding? The scream of French bombers taking off for Syria?
Tuesday, in contrast, the nail biting resumed over what the Federal Reserve may (or may not) do to interest rates next month.
The major market indexes stalled, and utilities took a nasty tumble.
Go figure.
For us, at least, Tuesday finally brought some cheerful news from Walmart (WMT). After disappointing investors for most of 2015, the retail behemoth came through with higher than expected Q3 earnings ($1.03 per share versus the analyst consensus of 98 cents).
U.S. same-store sales, up 1.5% year-over-year, clocked their fifth consecutive quarterly gain.
On Tuesday’s conference call, Walmart CEO Greg Foran pointed to the company’s improved numbers as evidence that the business “is starting to get some good momentum.” That was all Wall Street needed to hear. Eager bulls pushed Walmart shares up 3.5% on the session.
While I welcome this bounce, I must caution you that Wally still has a long, winding recovery road ahead. Investors can afford to be patient, however because Walmart stock is paying a generous 3.3% “rent” (cash yield).
Five years from now, with dividends reinvested, I think Walmart stock will have made you 60%-80% wealthier.
