Daily Scoop 22-5-18

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Today's Scoop:Fear

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Big Picture

1. Today was the worst day in the markets since 2020.

2. Higher costs are eating into corporate profits.

3. Homes are less affordable, and it's slowing construction. 

The Market: 

⬇️

-4.0%

S&P 500: 3,923.68

1Mo:

-12% 

| 1Yr:

-5%

| 5Yr: 

+65%

Markets had their worst day since June 2020 after a hugely positive day yesterday. Investors can't decide

whether the economy will head into a recession or just grow a little more slowly.

Corporate financial reports this week sent

mixed messages about the health of the consumer and the impact of inflation on corporate profits.

Reports from significant consumer retailers like Walmart, Home Depot, Target, and Lowe's mostly indicated strong sales growth. However, each showed some inconsistent shifts in the things consumers purchased. Investors didn't love seeing Target and Walmart eat the higher costs for supplies and labor instead of passing them on to the consumer by raising prices like most companies.

The Commerce Department reported a

decline in home building activity

last month, as inflated supply costs, labor shortages, and higher mortgage rates have quickly made

buying a home less affordable

.

Company Scoops ❤🌎💰

(Click to dig in & vote your reaction, see how others feel)

Coinbase

cancels growth mode

-

Netflix

starts slashing staff

- 

Target's

taking one for the team

- 

Microsoft's

slinging big paychecks

- 

Lowe's

gets a cold

(These links only work for 24 hours while the story is live)

🤓 Inside Scoop...

Earnings Per Share (EPS)

is one of the two main metrics you'll find in the news about a corporation's quarterly financial update.

Earnings

is another word for

profit

, and so is

net income.

Earnings per share are the company's profit divided by the number of shares available. It's a standard way for an investor to evaluate whether the company is earning more or less profit this quarter than the investor expected. It's also helpful to understand how much the stock price is marked up over the company's profitability. If one company's share price is 15x higher than its earnings per share, it means investors are more confident in that company's future than a company whose share price is 12x its EPS.

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