On Tuesday (July 26), U.S. stocks futures and cryptocurrencies after in the red partly as the result of retail giant Walmart Inc. (NYSE: WMT) lowered its forecast for FY2023 Q2 earnings (expected to be released on 16 August 2022).
On Monday (July 25), after the U.S. stock market closed, Walmart issued a press release, in which Doug McMillon, Walmart ‘s president and chief executive officer, stated:
“The increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress clearing hardline categories, apparel in Walmart U.S. is requiring more markdown dollars. We’re now anticipating more pressure on general merchandise in the back half; however, we’re encouraged by the start we’re seeing on school supplies in Walmart U.S.“
The U.S. company went on to say that “based on the current environment and the company’s outlook for the remainder of the year,” it had updated its operating income and EPS guidance as follows:
- “Operating income for the second-quarter and full-year is expected to decline 13 to 14% and 11 to 13%, respectively. Excluding divestitures, operating income for the full year is expected to decline 10 to 12%.“
- “Adjusted earnings per share for the second quarter and full year is expected to decline around 8 to 9% and 11 to 13%, respectively. Excluding divestitures, adjusted earnings per share for the full year is expected to decline 10 to 12%.“
Currently — i.e. as of 9:35 a.m. UTC (or 5:35 a.m. EDT) — Dow Jones Industrial Average futures, S&P 500 futures, and Nasdaq 100 futures are down 0.46%, 0.31%, and 0.33% respectively.
As for the crypto market, currently (as of 9:52 a.m. UTC on July 26), Bitcoin ($BTC) and Etheruem ($ETH) are trading around $21,138 and $1421 respectively, down 3.99% and 7.39% in the past 24-hour period. As for other 20 cryptoassets, with the exception of stablecoins, they are all in the red.
It is, of course, not just changing consumer behavior (i.e. spending more on essentials such as food and fuel instead of discretionary items) due to higher inflation that is making investors and traders nervous. This is a huge week for both U.S. stocks and crypto since lots of major U.S. companies rare reporting their quarterly earnings (and providing updated profit forecasts), important economic data such as Q2 U.S. GDP is being released, and we find out from the Fed if it is raising the federal funds rate by 0.75% or 1% (most analysts are expecting a 75 basis points hike).