It was a week dominated by war in Ukraine as Russia staged a full-blown invasion of its neighbour. The move sparked market volatility although the damage to US stocks was relatively limited. This potentially reflected America's greater geographical distance from the scene of the conflict as well as the country's increased insulation, relative to Europe, to disrupted trade and energy supplies.
According to the BP Statistical Review of World Energy 2021 the US is the world's leading producer of both oil and natural gas with a share of global production of 18.6% and 23.7% respectively. There also appears to be some relief in the market that Russian sanctions are not yet perceived as severe enough to have a more widespread economic impact.
The US is still expected to see an increase in already considerable inflationary pressures because of the conflict, raising the stakes ahead of the Federal Reserve's next meeting to decide interest rates on 15-16 March.
EBAY
Despite beating earnings expectations for the fourth quarter of 2021 and declaring an 22% increase in the quarterly dividend to $0.22 per share, Ebay briefly spooked investors with its outlook for the start of 2022 as it comes up against tough comparative figures.
Its share price fell 8% in after-hours trading after reporting numbers on 23 February, with guidance for first quarter 2022 earnings per share of between $1.01 and $1.05 per share, versus market estimates of $1.07. However, the shares had recovered all their lost territory by the end of the week.
Over the past two years Ebay has benefited from people clearing out their homes of unwanted goods to boost their income during the pandemic. The fourth quarter of 2021 saw $1.05 earnings per share versus market forecasts of $0.99, with its advertising business growing faster than marketplace volumes during this period.
HOME DEPOT
Shares in US DIY chain Home Depot have fallen 10% since it reported fourth quarter results on 22 February thanks to a downbeat outlook.
Revenue was up 11% to $35.7 billion in the three months to 31 January 2022, ahead of analyst expectations and taking sales above the internal target for the financial year as a whole at more than $150 billion.
Like-for-like sales accelerated quarter-on-quarter from 6% to 8%. Despite rising input costs, the company managed to eke out enough savings to grow its operating margin from 14% to 15% year-on-year.
There were some more troubling trends underlying the numbers though, with customer traffic falling for a second consecutive quarter which meant the company's growth was reliant on individual customers spending more money.
Home Depot is essentially guiding for zero growth in 2022 which reflects cost of living pressures, and the fact consumers may well prioritise travel and leisure after a period when their ability to enjoy these activities has been constrained by Covid.
INTUIT
Best-known for its QuickBooks small business accounting suite, Intuit saw second quarter operating profit leap from $235 million to $612 million on a 70% revenue jump to $2.67 billion yet still missed forecasts by a big margin.
Earnings per share for Q2 to 31 Jan came in at $1.55 versus $1.85 expected on $2.73 billion revenue estimates overnight on 24 Feb. Unsurprisingly, this nipped in the bud any rally for the shares, which posted a near-5% decline in after-hours trading.
Perhaps most notably though is Intuit's push beyond its core market. In late 2020 it paid $7.1 billion for credit scorer Credit Karma and three months ago shelled out another $12 billion for automated digital marketing platform Mailchimp. Both deals have transformational potential as Intuit increasingly builds an end-to-end customer oriented e-commerce business.
