(CercleFinance.com) – Wall Street showed heaviness on Tuesday, investors wondering about the imminence of a recession the day after the downward revision of forecasts by consumer giant Walmart.
At the end of the morning, the Dow Jones yielded 0.3% to 31,880.7 points, while the Nasdaq Composite fell 1.3% to 11,623.5 points.
Walmart, the number one in the distribution sector in the United States, revised downwards its annual objectives last night, which caused its stock price to fall and led to the decline of other values in the sector.
Analysts believe that its prospects are rather worrying at a time when many economists consider that the United States is on the way to a recession.
‘Walmart has confirmed the worst fears of investors after having already revised downwards its forecasts for the first quarter’, underline the teams of Wells Fargo.
“This means that the group had not sufficiently lowered its ambitions in the face of the risk posed by the accumulation of inventories and the slowdown in consumer spending”, specifies the bank.
The action is currently unscrewing by 8.8%, which brings its losses since the start of the year to nearly 17%.
Other signs of recession are emerging very clearly in the economic indicators.
The consumer confidence index compiled by the Conference Board thus fell by 2.7 points in July to stand at 95.7 against 98.4 in June, while economists were expecting it around 96.
The Department of Commerce, for its part, reported an 8.1% decline in sales of new homes in the United States in June.
Walmart’s warning, which is making investors increasingly concerned about the health of the economy, weighs particularly heavily on the retailer compartment.
The American chain of low-cost stores Target lost 4.1% and the group of warehouse stores Costco Wholesale lost 3.3% while the chain of DIY stores is doing well, losing less than 2.8 %.
The so-called ‘discretionary’ consumer sector index, that is to say not constrained, thus fell by 2.5%.
Walmart’s warning also leads investors to wonder about the future results of technology companies, which are also very exposed to consumer demand, starting with Apple.
Microsoft, which will publish its results just after the closing, lost more than 2% while Alphabet, which will also reveal its accounts this evening, lost 1.5%.
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