Walmart's shares Tank -9% on Profit Warning
"The magnitude of Walmart’s second profit warning in barely two months makes you wonder how other retailers will manage their way through inflationary turmoil.
The world’s largest retailer is now forecasting its operating profit will slide about 13 per cent in the second quarter and full year as food inflation wallops shoppers, leaving them with less to spend on general merchandise, which Walmart says left it with bloated inventories of general merchandise. Its shares have tumbled upward of 10 per cent in pre-market trading." - read more on BNN here
Federal Reserve Meeting This Week 0.75% Rate Hike Expected
"The Fed is widely expected to raise its main interest rate by 0.75 percentage points for the second consecutive month this week, which would increase the funds rate to a range of between 2.25 per cent and 2.5 per cent.
“There’s this thesis of a shallow recession now that brings inflation lower,” said Tim Graf, head of European macro strategy at State Street.
But he warned of a “deeper and longer slowdown” if the Fed continued raising borrowing costs aggressively after this month.
The annual rate of US inflation rose to 9.1 per cent last month and the jobs market in the world’s largest economy remains strong, with employers hiring a higher than expected 372,000 new workers last month. But signs of a housing market slowdown and a consumer spending decline have begun to emerge." - read more on FT here
Breaking Thoughts: While the market is expecting a 0.75% hike, it is possible given strong topline economic data plus strong inflation that the US Federal Reserve follows in the footsteps of the Canadian Central Bank and raises by a full 1.00%.
Accelerated interest rate hikes will spell more trouble for global stock markets, especially as even large companies like Walmart are issuing inflation related profit warnings. Investors need to tread lightly, consider building up some cash holdings, taking some profits, and/or shifting partly towards income/gold.
Major Earnings This Week
Tuesday July 26:
Google (GOOG): Expected Q2 earnings of $1.30 per share
Coca-Cola (KO): Expected Q2 earnings of $0.70 per share
General Motors (GM): Expected Q2 earnings of $1.14 per share
McDonald's (MCD): Expected Q2 earnings of $2.47 per share
Microsoft (MSFT): Expected Q4 earnings of $2.29 per share
Visa (V): Expected Q3 earnings of $1.75 per share
Wednesday July 27:
Ford (F): Expected Q2 earnings of $0.44 per share
Qualcomm (QCOM): Expected Q3 earnings of $2.87 per share
Shopify (SHOP): Expected Q2 earnings of $0.02 per share
Spotify (SPOT): Expected Q2 earnings of $-0.64 per share
Thursday July 28:
Amazon (AMZN): Expected Q2 earnings of $0.13 per share
Apple (AAPL): Expected Q3 earnings of $1.16 per share
Mastercard (MA): Expected Q2 earnings of $2.36 per share
Telus (TU): Expected Q2 earnings of $0.30 per share
Major IPOs Expected This Week
None
See you next week!
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The Market News Reel for this week! Get the most important market news & updates for the week ahead! Major headlines, excerpts from news sources are shown above. "Breaking Thoughts" section is purely our opinion.