Recent weeks have seen a sharp decline in indexes showing consumer sentiment on both sides of the Atlantic. It seems that the war, inflation and interest rate hikes or their announcements are effectively holding back consumer demand, which in turn could be reflected in an expected stagflation or recession.
Data on consumer attitudes toward spending their money was confirmed yesterday by US retail giant Walmart. Walmart has more than 10000 stores and numerous eCommerce sites, with some 230 million customers from 24 countries visiting each week. With fiscal year 2022 revenues of $573 billion, Walmart employs about 2.3 million workers worldwide.
Yesterday, after the session, the company noted that consumers are reducing their spending due to rising prices. Customers are focusing on necessities, including food, while spending less on clothing or electronics, the company reported. Thus, Walmart slashed its quarterly and annual earnings estimate expectations. As a result, the company's share price fell about 10 percent in after-session trading, dragging other retail-oriented companies down with it. Target fell by more than 5 percent, Macy's by more than 4 percent, and Amazon by more than 3 percent. Soon the companies will publish results: Alphabet, Microsoft, Visa, Coca-Cola and McDonald's.
In the commodities market, WTI crude oil futures rose above $98 per barrel on Tuesday. Tensions between the West and Russia remain elevated as G7 countries prepare to impose a price cap on Russian oil, but Moscow has rejected such plans and said it will not supply oil to countries that impose such restrictions. Russia's Gazprom has also announced that supplies through the Nord Stream 1 pipeline to Germany will drop to just 20 percent of capacity, which could fuel a shift from gas to oil as an energy source, possibly driving up prices. Meanwhile, recent data from the U.S. and Europe already point to an economic slowdown, with China chafing at an economic contraction in the second quarter.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trade this news from Conotoxia Ltd. platforms
Go to your account
