Big‑ticket retailers, tech‑heavy software firms, and record‑setting indexes have been the headline act on the tape lately. Add a fresh wave of bond buying that nudged the 10‑year Treasury back under 4.2 %, and the mood in the global bull market feels a bit uneasy.
Last week’s flat December retail‑sales number didn’t do much to calm nerves, while a solid January jobs report and a modest CPI reading offered some relief.
Walmart’s Q4 Report and the PCE Calendar
The most important data point this week is Walmart’s fourth‑quarter earnings, slated for Thursday morning. The retailer, now valued at roughly $1.07 trillion, has already rallied about 20 % this year – its best start since 1991 – and ranks among the top performers in the Dow.
The broader consumer‑staples segment is up roughly 16 % year‑to‑date, making the upcoming earnings release a litmus test for the sector’s momentum.
Technical Landscape: Staples Lead, Tech Lags
Walmart’s price action has been textbook bullish. The stock closed last week above $132, marking an all‑time weekly high. The RSI has hovered in the 40‑80 range since last spring, while the 200‑day moving average continues to tilt upward, indicating that long‑term buyers remain in control.
Volume clusters reveal that most trading happens above the $105 level, the prior year’s high. A brief spike a month ago appears isolated, while a rising 50‑day average provides a clear short‑term support line.
Even though the RSI is now in the over‑bought zone (above 70), the price has already breached the low‑130s target that was set by the February‑April 2025 pullback. A modest pullback after earnings would be normal, but the real story will emerge from the options market.
The Options Perspective
Current implied volatility for Walmart sits just under 40 %, nearly double the S&P 500’s level, and the market is pricing an expected move of about 4.8 %. That makes the straddle relatively pricey – the most expensive in the past three years.
Walmart at the Intersection of Spending and AI
Walmart is a bellwether for two macro‑forces shaping today’s markets: a widening K‑shaped economy and the rapid adoption of artificial intelligence in retail operations. The company’s massive data infrastructure and recent tech‑focused leadership changes are turning the traditional retailer into a digital powerhouse.
How Much Can Defensives Deliver?
Many mega‑cap tech charts are under pressure. If Walmart’s earnings miss expectations, the defensive and value themes that have propelled the market so far could lose steam, potentially pulling even cyclical names down.
A 10 % correction in Walmart would still leave the stock above its 50‑day average and the uptrend line highlighted earlier – a scenario that many traders would deem manageable.
Upcoming Economic Triggers
Later this week, the Q4 GDP release will include the Personal Consumption Expenditure (PCE) data, a metric that can sway market sentiment and retail stocks alike. The exact dates for the January retail‑sales and PCE releases are still pending.
Other retail earnings to watch include Home Depot and Lowe’s early next week, followed by TJX on the 25th and Target on March 3.
Bottom Line
Consumer staples have outperformed the broader market so far this year, positioning them as the unlikely leaders of the 2026 bull run. While earnings numbers matter, the price reaction often tells a richer story. Walmart’s performance on Thursday could set the tone for high‑momentum defensive stocks moving forward.
Disclaimer: This content is for educational purposes only and does not constitute financial advice.
Source: Materials provided by https://articles.stockcharts.com.Note: Content may be edited for style and length.