Negative Wall Street, with sales raging especially on Nasdaq, therefore on technology stocks. The inflation alert that was launched by the American retailer giant Wal-Mart weighs in general. At 4 pm Italian time, the Dow Jones lost 0.30% to 31.893 points; the S&P 500 retreated 0.60% to 3,943, the Nasdaq fell more than -1% to 11,663 points.
The group announced that it has cut its quarterly and full-year 2022 earnings guidance due to the negative consequences of inflation, which is causing consumers to spend more on necessities such as food than on other products such as clothing. and electronics.
Wal-Mart sinks on Wall Street with a thud of more than -8%: the action has a negative domino effect on retailer stocks such as Target -4.6% and Amazon. The quotations of the US e-commerce giant dropped about 3%.
The problem of inflation was also highlighted by the new World Economic Outlook (WEO) just issued by the IMF, International Monetary Fund.
The Washington institution cut its estimates on the global GDP trend for 2022 and 2023, respectively to + 3.2% and + 2.9%, with a downgrade of 0.4 and 0.7 percentage points compared to the ‘outlook for April.
The IMF explained the downside revision by the fact that the downside risks it presented in its previous report are materializing. Among the challenges on which the Fund had warned, those of a global outbreak of inflation, a slowdown in the economy worse than expected in China and the further consequences unleashed by the war between Russia and Ukraine.
Among the blue chips, the decline in the title of the auto giant General Motors (-2.7%), which announced a worse than expected quarterly report, due to the interruptions in the supply chain caused by both the war between Russia and Ukraine which from lockdowns to stem Covid which have hit China above all.
Instead, Coca-Cola’s accounts did well, showing earnings per share of 70 cents, better than the 67 per share expected by the consensus, and revenues of $ 11.3 billion, higher than the expected $ 10.56 billion.
The US multinational has also improved estimates on organic growth in turnover, now expecting an increase for the whole year of between 12% and 13%, compared to the previous guidance of an increase between 7% and 8%. But even Coca Cola acknowledged the threat of inflation, stating that it expects a higher cost of raw materials: the outlook on the growth of eps has thus remained unchanged at a rate between 5% and 6% compared to the Last year. However, the Coca-Cola stock reacts positively to the quarterly report, rising by more than + 2%.
Focus also on McDonald’s, which announced that it had closed the second quarter of 2022 with higher than expected comparative sales growth in the United States, in the wake of the higher prices of products sold, supported by runaway inflation. The quarter ended with net income of $ 1.19 billion, or $ 1.60 per share, down from $ 2.22 billion, or $ 2.95 per share, for the same period last year. McDonald’s faced a $ 1.2 billion burden related to the decision to dispose of its business in Russia following the Kremlin invasion of Ukraine.
The meeting of the FOMC, the monetary policy arm of the Fed, begins today: tomorrow the announcement of the US central bank on interest rates will arrive.
Some analysts are not ruling out a new monetary tightening by the Federal Reserve led by Jerome Powell of 100 basis points. On average, the forecast is for a rate hike of 75 basis points from the current range of 1.50% to 1.75% in order to counter runaway inflation.
Yesterday’s session was marked by weakness for Wall Street, with the S&P 500 up just 0.1%, the Dow Jones Industrial Average up 0.3% and the Nasdaq Composite underperforming the US stock market.
Alphabet, Microsoft and Chipotle Mexican Grill will be among the companies reporting quarterly reports after the session ends.