Inflation cooled more than expected for the first time this year, boosting stocks to record highs, with the S&P 500 achieving this in just 48 days compared to 746 days previously. Recent challenging data, including flat retail sales in April, have fuelled speculation about potential Federal Reserve rate cuts. The CME Fed Watch Tool now shows a 75.3% probability of a rate cut at the September Fed meeting, up from 44.9% on Tuesday. However, Fed Chair Jerome Powell has stressed the need for patience, noting that inflation is falling slower than anticipated.
Cisco Systems Inc (CSCO)
Cisco reported better-than-expected earnings and revenue for its fiscal third quarter, despite a notable decline in sales compared to the previous year. The company's adjusted earnings per share were 88 cents, surpassing the expected 82 cents, and revenue was $12.7 billion, beating the forecasted $12.53 billion. CEO Chuck Robbins noted that the supply chain challenges are nearing an end, and fiscal year-end projections remain positive. Cisco increased its fiscal 2024 revenue guidance and slightly narrowed its full-year earnings forecast. The stock rose by 8% in extended trading following the announcement.
CSCO (Daily). Drawing a Fibonacci line from the highest level to the lowest level after the stock split, the price succeeded in breaking out 38.2% at 48.90 and aiming for the 61.8% level at 50.20.
Berkshire Hathaway Inc (BRKB)
Buffett trimmed Berkshire's Apple holdings by 13% for tax reasons, potentially to avoid a higher future tax bill. Despite these adjustments, Berkshire’s top 10 holdings remained unchanged. Additionally, Berkshire reduced its stake in Louisiana-Pacific by about 6% and exited its position in HP. At Berkshire’s annual meeting, Buffett mentioned that the company completely divested its stake in Paramount at a loss. Avoiding future mistakes and expenses, Berkshire Hathaway is projected to continue its bullish trend.
BRKB (Daily). Strong bounce from double bottom, Berkshire Hathaway rises with confidence. The projected levels from the first and second highest levels indicate that prices will head towards the price region between 417.70 to 429.90.
Walmart Inc (WMT)
Walmart anticipates a 4% to 5% increase in quarterly and full-year sales, with adjusted earnings per share of $1.48 to $1.56 pre-stock split. The company has been cutting costs by laying off and relocating employees and closing health clinics while acquiring Vizio for $2.3 billion and modernising over 1,400 stores. It also launched a new private-label grocery brand targeting younger, affluent shoppers.
WMT (H1). This is the first time Walmart has broken its all-time high following its February 23rd stock split. Waiting for retracement into the gap between 61.30 and 63.10 for an ideal buy.
Fullerton Markets Research Team
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