Wall Street’s main indexes ended Tuesday’s trading in heavy losses near the day’s lows amid concerns over Walmart’s announcement yesterday about the impact of inflation on its profitability and the IMF’s warning today that the global economy may on the brink of recession if the serious challenges it faces are not addressed.
The American retail giant Walmart revised its forecast downward yesterday on full-year earnings, highlighting the impact of persistently high inflation.
Walmart now expects earnings to fall 8% to 9% in the second quarter and 11% to 13% for the full year, after its previous forecast was for flat or slightly increased profitability in the second quarter with a slight 1% decline on the year .
Walmart’s warning led to big losses for other industry giants, such as Target and Amazon which closed down -3.6% and -5.3% respectively.
Indicators – Statistics
On the board, the Dow Jones lost 228.50 points, or -0.71%, to end at 31,761.54, while the S&P 500 fell 45.79 points, or -1.15%, to 3,921.05. The tech Nasdaq fell 220.09 points, or -1.87%, to 11,562.57.
Of the 30 stocks that make up the Dow Jones industrial index, 12 closed with a positive sign and 18 with a negative. The biggest increase was recorded by 3M with gains of $6.63 or 4.94% to $140.75, followed by McDonald’s at $257.09 with an increase of 2.68% and Coca-Cola with gains of 1, 64% to $63.21 as it beat estimates for its results and revised upward its sales for the year.
The biggest losers were Walmart (-7.60%), Salesforce (-3.85%) and Nike (-3.73%).
Further pressures on the investment mood came from the IMF, which today again downgraded its forecasts for global growthwarning that downside risks from high inflation and the war in Ukraine could push the global economy to the brink of recession if left unchecked.
At the same time, investors await the Fed’s decisions tomorrow, after the conclusion of its two-day monetary policy meeting. The market is more or less taking a rate hike of 75 basis points again as a given and is looking more for clues on their future path.
Finally, in today’s macroeconomic news, the housing market showed marginal de-escalation trends for the second consecutive month of the US, with S&P’s national Case-Shiller index slowing slightly.
In particular, house prices in May were up 19.7% year-on-year, after 20.6% in April.
At the same time, consumer confidence fell in July to its lowest level since February 2021 amid negative assessments of the economy’s path and persistently high inflation.
In particular, the Conference Board’s index moved downwards for the third consecutive month, falling to 95.7 points from a downwardly revised reading of 98.4 in June. It is noted that in a Bloomberg survey of economists, the average estimate expected a milder drop to 97 points.
Source: Capital
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