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CLOSING BELL
Market Running On Fumes

After a six-session climb and 19 positive days of the past 25, the S&P 500 fell Tuesday, running out of steam. Retailers and Fed speakers are worried about summer price increases from tariffs, the GOP can’t decide on a tax bill, and the ripping market can only climb so much, especially after retail bought $4B worth of the slight dip Monday, according to JPMorgan Analysts.

St. Louis Reserve Pres. Alberto Musalem said Tuesday that the FOMC and gang have to wait until tariff price raises are over before gauging inflation. He said a ‘look-through’ policy, ignoring tariffs, imagining underlying inflation could be too difficult, and if they miss, they miss big.  👀

Today's issue covers Home Depot, Where Doers Don’t Pay For Tariffs; Palo Alto ‘Aint Growin’ Like It Used To, and more. 📰

With the final numbers for indexes and the ETFs that track them, 3 of 11 sectors closed green, with health care $XLV ( ▼ 0.5% ) leading and consumer discretionary $XLY ( ▼ 0.92% ) lagging.

STOCKS
Home Depot, Where Doers Don’t Pay For Tariffs 🔨 

While Walmart said it was raising prices, Home Depot said in its quarterly earnings call that it was trying its hardest to diversify its supply chain and keep prices the same.

CFO Richard McPhail told the Wall Street Journal that Home Depot suppliers have tried to push them into price raises, haggling over who will pay what portion of the 30% import tariffs on Chinese goods. The firm sources about half of its goods from the U.S.

McPhail said that in a year, he aimed to have no single country supplying more than a 10% share of their goods.

He also said bad weather hurt comparable sales growth globally, but strong employment meant customers still paid for home improvement projects stateside, pushing U.S. comparable sales higher YoY.

Lowes is set to report tomorrow, and investors watching the home improvement retailers will wait to see how they decide to forecast their coming year.

Walmart and Home Depot kept their forecasts for the year unchanged, though Walmart said tariffs might push them to raise prices. Home Depot missed earnings estimates by four cents on lower comparative sales. They did not say they were eating tariffs, but they did say they would try to avoid paying them altogether.

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