Walmart (WMT Stock) confirms consumer problem
|Recent weeks have seen a sharp decline in indexes showing consumer sentiment on both sides of the Atlantic. It seems that the war, inflation and interest rate hikes or their announcements are effectively holding back consumer demand, which in turn could be reflected in expected stagflation or recession.
Data on consumer attitudes toward spending their money was confirmed yesterday by US retail giant Walmart. Walmart has more than 10000 stores and numerous eCommerce sites, with some 230 million customers from 24 countries visiting each week. With the fiscal year 2022 revenues of $573 billion, Walmart employs about 2.3 million workers worldwide.
Yesterday, after the session, the company noted that consumers are reducing their spending due to rising prices. The company reported that customers are focusing on necessities, including food while spending less on clothing or electronics. Thus, Walmart slashed its quarterly and annual earnings estimate expectations. As a result, the company's share price fell about 10% in after-session trading, dragging other retail-oriented companies down with it. Target fell by more than 5%, Macy's by more than 4%, and Amazon by more than 3%. Soon the companies will publish results: Alphabet, Microsoft, Visa, Coca-Cola and McDonald's.
WTI crude oil futures rose above $98 per barrel on Tuesday in the commodities market. Tensions between the West and Russia remain elevated as G7 countries prepare to impose a price cap on Russian oil, but Moscow has rejected such plans and said it would not supply oil to countries that impose such restrictions. Russia's Gazprom has also announced that supplies through the Nord Stream 1 pipeline to Germany will drop to just 20% of capacity, which could fuel a shift from gas to oil as an energy source, possibly driving up prices. Meanwhile, recent data from the U.S. and Europe already point to an economic slowdown, with China chafing at an economic contraction in the second quarter.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.