The Fed's next interest rate step will probably be larger than expected, which unsettles stockbrokers. In addition, the slump in Walmart shares is causing further falls in prices for retailers such as Amazon. Coca-Cola, on the other hand, can look forward to a substantial increase.
A potential setback for the US economy from a slacking consumer spending mood is weighing on Wall Street. In addition, the forthcoming interest rate decision by the Fed fueled tension among investors. The US standard value index Dow Jones fell by 0.71 percent to 31,761.54 points. The broad S
Walmart's second profit warning within two months hit investor sentiment. "It's not a surprise," said Eugenio Aleman, chief economist at wealth advisor Raymond James. With high inflation, consumers would become more selective in their consumption. "They reduce purchases of discretionary items in favor of essentials." The reduced targets broke Walmart's share price down 7.47 percent. In their wake, the titles of other retailers such as Amazon or Target slipped by up to five percent.
When it comes to monetary policy, stockbrokers are certain that the Fed will raise the key interest rate again by 0.75 percentage points on Wednesday. Therefore, the focus is on the view. "It's not unlikely that the central bank wants a recession as it would hurt prices," said Frederic Leroux, investment manager at wealth manager Carmignac. For this reason, it will probably maintain its rate hike rate for the time being. That would come as a shock to some investors, who were hoping for a smaller move of half a percentage point in September.
At the same time, the price of US natural gas rose at times by almost twelve percent to a 14-year high. In addition to the reduced deliveries from Russia to Europe, the prospect of a sustained heat wave in the USA is driving prices, the analysts at the consulting firm EBW Analytics wrote. It increases the demand for electricity for air conditioning, which has already reached record levels in some US states. In addition, suppliers are increasingly switching to natural gas as an energy source due to record-high coal prices. The US crude oil WTI was unable to maintain its initial gains and fell almost a percent to $ 95.03 per barrel (159 liters). In the fight against high energy prices, the US wants to throw another 20 million barrels of crude oil from its strategic reserve onto the market. In the past few months, the country has already sold 125 million barrels from government stocks.
On the stock market, Coca-Cola was one of the favorites with a price increase of 1.35 percent. Thanks to robust demand, the beverage manufacturer raised its sales targets for the full year. In addition, the results for the past quarter exceeded the high expectations, praised analyst Kevin Grundy from the investment bank Jefferies. All divisions and regions contributed to this. The planned spin-off of the health division gave 3M the biggest price jump in two and a half years. The titles of the conglomerate, which offers "Post-It" sticky notes, among other things, rose by 4.84 percent. In the past quarter, profits reportedly fell due to the corona lockdowns in China, but remained above market expectations.
