Home Depot reports better-than-expected Q2 results and FY27 outlook

$40 Trillion Debt Please click here for an enlarged chart of Home Depot Inc (NYSE: HD ).

Note the following: This article is about the big picture, not an individual stock.

The chart of HD stock is being used to illustrate the point.

The trendline on the chart shows HD stock has been in a downtrend.

The reason has been persistently high interest rates.

The chart shows HD stock is gapping up on earnings.

Prudent investors should keep an eye if HD stock can break above the trendline shown on the chart.

A break above the trendline will likely be a positive tell for the entire stock market.

On the other hand, if the rally that is starting today fails, it will be a negative.

Home Depot earnings are important because it is the largest home improvement retailer in the U.S.

Its earnings give another important data point on the consumer picture.

Consumers are important because the U.S. economy is 70% consumer based.

Home Depot earnings are better than consensus and whisper numbers.

Here are the details: Home Depot reported EPS of $4.92 vs. $4.73 consensus.

Home Depot reported Q2 revenue of $47.86B vs. $47.24B consensus.

Home Depot guides FY27 earnings of $14.69 — $15.28 vs. $14.94 consensus.

Home Depot guides FY27 revenue of $168.8B — $172.1B vs. $170.94B consensus.

Alarm bells are ringing about the U.S. national debt.

Smart money is paying attention, but the stock market momo crowd is oblivious.

U.S. national debt is quickly approaching $40T.

Troubling to smart money are the following: U.S. leaders do not have a plan to contain the debt.

U.S. leaders are talking about measures that will increase the debt growth.

Yields are rising.

As of this writing, the 10 year Treasury yield is 4.736%, and the 30 year Treasury yield is 5.315%.

The 30 year yield is the highest since 2007.

Prudent investors should note that it is not only the U.S.

Yields are rising across the globe.

There are two reasons: Rising debt across the globe Concern that oil prices will rise further as the U.S. and Iran are in a stalemate In our analysis, the rally in the AI trade that was triggered by the collapse of the $45B Situational Awareness fund that lost 67% in July is showing first signs of exhaustion.

Memory stocks such as Micron Technology Inc (NASDAQ: MU ), SK Hynix Inc — ADR (NASDAQ: SKHY ), and SanDisk Corp (NASDAQ: SNDK ) have had an explosive rally over the last few days triggered by Sandisk’s investor day.

In the early trade, memory stocks are pulling back.

Housing Starts Rising interest rates are hurting housing.

Here is the latest data: Housing starts came at 1.239M vs.

1.36M consensus.

Building permits came at 1.443M vs.

1.39M consensus.

Magnificent Seven Money Flows Most portfolios are now heavily concentrated in the Mag 7 stocks.