US market indices are moving lower as a downward revision of Walmart’s guidance and a downgrading of the IMF’s estimates for global growth weigh on investor sentiment, ahead of the Fed meeting starting today.
In particular, the Dow Jones industrial index is moving at 31,869 units with losses 0.4%the broader S&P 500 loses 0.8% and is located at 3,938 unitswhile the biggest pressures are on the tech-weighted Nasdaq, which is showing a decline 1.2% moving on 11,648 units.
US retail giant Walmart cut its full-year profit forecast, pointing to the impact of persistently high inflation, and sees its stock sink by 8.6%.
Along with it, it drags other industry giants, such as Target which registers strong losses of 4% and Amazon which moves to -3%, while Kohl’s loses 6%, Dollar General 2% and Costco 3%.
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 .
“What’s most important from Walmart’s announcement is how inflation is changing what people buy. Food is now a bigger share of people’s budgets, although overall spending remains broadly intact,” notes Robert Cantwell, portfolio manager at Upholdings.
Elsewhere, General Motors is down 2.3% after reporting lower-than-expected results, while UPS is also down 4.7% despite reporting higher adjusted quarterly earnings.
In contrast, Coca-Cola rose more than 2% as it beat estimates and revised its sales up for the year.
Further pressure on investment sentiment came from the IMF, which today again downgraded its forecasts for global growth, warning that downside risks from high inflation and the war in Ukraine could push the global economy to the brink of recession if not be dealt with.
At the same time, traders await the barrage of announcements of results from the tech giants, with Alphabet and Microsoft tonight after the end of the meeting, as well as the decisions of the Fed, which starts its two-day monetary policy meeting today.
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 the day’s macro news, the US housing market showed marginal easing trends for the second straight month, 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.
Source: Capital
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