Coffee With Greta: Home Depot’s Consumer Warning

DJIA Futures: -90 (-0.3%)

SPX Futures: -9 (-0.2%)

NASDAQ Futures: -21 (-0.2%)

Good morning friends!

Futures are falling after disappointing results from Home Depot prompt worries about the consumer.

Let’s get right to it!

Home Depot Drops On Revenue Miss, Lower Outlook

Home Depot (HD) shares are falling 2.5% ahead of the open after missing Q1 sales expectations and lowering its full-year outlook.

Here’s how the home improvement retailer’s results compared to analysts’ estimates:

It was the company’s largest revenue miss in 20 years and the second quarter in a row it missed sales estimates.

Comparable sales dropped 4.6% in the U.S. with the CFO saying lower lumber prices accounted for more than 2% of that drop.

Home Depot now expects sales to decline between 2% and 5% in 2023 vs its previous outlook for sales to be flat.

The retailer also expects full-year EPS to fall 7% to 13% vs the 5.7% estimate.

U.S. retail sales rose less than expected in April.

The Commerce Department reported retail sales rose 0.4% last month to $686.1 billion.

That was a rebound from the 0.7% decrease in March but lower than expectations for a 0.8% increase.

Total sales were 1.6% higher year over year.

Retail sales excluding autos rose 0.4% in April, in-line with expectations.

The National Association of Homebuilders releases its May sentiment index at 10:00 a.m. ET.

That survey is expected to be unchanged from April at 45.

Confidence among builders remains in negative territory but has been improving in recent months as the 6-month expectations improve.

Builders are looking ahead to lower mortgage rates in the future as the Fed appears to be done with the latest rate-hiking cycle.

Consumer debt surpassed $17 trillion for the first time in Q1. New data from the New York Fed on Monday showed total borrowing totaled $17.05 trillion in the first three months of the year. New mortgage originations totaled $323.5 billion, the lowest level since Q2 2014 and down 62% year over year. Student loan debt rose to $1.6 trillion while auto loan debt rose to $1.56 trillion. Credit card delinquencies rose to 6.5% while auto loan delinquencies rose to 6.9%.