Walmart in the spotlight
Retail giants push Dow
08/16/2022, 10:58 p.m
Wall Street continues its recent recovery rally. Strong quarterly figures and prospects from retail groups Walmart and Home Depot are spurring on the good stock market mood among the standard stocks. On the other hand, the technology stocks on the Nasdaq are slightly down
Better-than-expected results from retail giants Walmart and Home Depot have boosted Wall Street. Of the Dow Jones Index the standard values closed 0.7 percent higher on Tuesday at 34,152 points. The broad one S&P 500 increased 0.2 percent to 4305 points. The tech-heavy one Nasdaq however, fell 0.2 percent to 13,102 points.
Better-than-expected corporate earnings had been driving US stocks for the past few days. According to data provider Refinitiv, 77.6 percent of companies in the S&P 500 exceeded analysts’ expectations with their quarterly figures. Easing price pressure in the US also provided tailwind last week, which fueled speculation that the US Federal Reserve would be slower in raising interest rates. “The ups and downs on the markets are essentially driven by interest rate expectations,” said Jason Pride of wealth manager Glenmede. Investors are eagerly awaiting the publication of the minutes of the most recent US Federal Reserve meeting on Wednesday. They hope that the so-called Fed Minutes will provide clues as to the extent of the next rate hike.
As fears of a recession faded from the stock market, the oil market was impacted by recent disappointing Chinese retail sales and industrial production figures. Grade Crude Oil Brent from the North Sea and US crude oil STI became cheaper on Tuesday by a good two percent to $93.07 and $87.22 respectively.
Retail was the focus of investors on Tuesday, as two industry giants, Walmart and Home Depot, presented figures. The shares of Walmart increased by 5.1 percent. Investors were pleased at the prospect of a smaller decline in annual profits than recently feared. The retail giant has been able to lure inflation-stricken customers with discounts. “Despite persistent inflation, the consumer appears to be holding up well,” said Kim Forrest, chief investment officer at Bokeh Capital Partners. The drop in petrol prices is also contributing to this. Just last month, Walmart scared investors with a lowered earnings forecast. Also the hardware store chain HomeDepot was able to score with quarterly sales and profits that were above forecast. The share certificates increased a good four percent.
The better-than-expected numbers from retailers fueled speculation that the Fed would step up interest rates. That drove the return on the ten-year US government bonds to 2.84 percent. Tech stocks like Apple and the Google parent alphabet noted slightly lower.
The US video service also went down zoom. The titles fell almost seven percent at the top after the analysts at Citigroup lowered the rating to “Sell”. Zoom’s growth course has always been a challenge after Corona, the experts stated. “But we see new hurdles to growth, including increasing competition from Microsoft Teams and macroeconomic weakness hitting small and medium-sized businesses.”