Wednesday,
July 27, 2022
Market recap
Dow Jones
31,761.54
ā228.50 (ā0.71%)
S&P 500
3,921.05
ā45.79 (ā1.15%)
Nasdaq
11,562.57
ā220.09 (ā1.87%)
Top Story
Stocks Slip as Walmart Slashes Forecast, Consumer Confidence Falls for Third Straight Month
• US stocks fell Tuesday as a negative report from Walmart seemed to sour investor sentiment. The retail sector giant slashed its profit forecast, potentially reinforcing the notion that rising prices are changing consumer spending habits. Other names in the retail and ecommerce sectors slipped for the session.
• The Consumer Confidence Index slipped for the third straight month in July. The figure is now down near a one-and-a-half year low. Analysts say this reflects the growing concern of a recession thatās been evident on both Wall Street and Main Street.
• The Conference Board also said consumers are delaying purchases due to inflation and related concerns. This includes major purchases such as motor vehicles. Market watchers suggest this could indicate tepid consumer spending during the second quarter.
• S&P CoreLogic Case-Shillerās national home price index showed prices are increasing at a slower pace. While prices surged 20.6% in April year-over-year, the number checked in at 19.7% in May on an annual basis. Analysts say while demand has fallen supply remains tight, making a housing market collapse less likely.
What to Be on the Lookout for Today
• The FOMC will announce its policy decision concerning rate hikes. The central bank is expected to enact an increase of at least 75 basis points in response to rampant inflation. Afterwards, Wall Street will be paying close attention to what Fed Chair Jerome Powell says at his press conference. Also, keep an eye out for Juneās durable goods orders, core capital equipment orders, advance report on trade in goods, and pending home sales index.
• The market will gain more insight into the tech industry and social media as Facebook parent Meta Platforms (META) shares its most recent results. Facebookās app was tweaked last week with multiple reports saying the new layout was designed to be more similar to TikTok.
The Fed Is Expected To Raise Interest Rates Today. Before They Do, Donāt Miss This Opportunity.
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A Few Headlines That Should Be on Your Radar
Where are Americans moving to? Well, thanks to remote and hybrid work, many emerging markets can be defined as both āaffordable and outdoorsy.ā These include spots in North Carolina and others dotted throughout the Midwest. As the red-hot housing market of the last two years cools off, there are spots where sellers could actually have the upper hand ā over the next eight months to a year. Read more >> Overdraft fees are not a small deal. They account for over half of the profits generated by mass-market consumer checking accounts. Meanwhile, many institutions are eliminating them. What do you need to know about these fees and how they can be avoided? It could pay to look into the terms of your checking account, as the history behind these types of fees is centuries long. Read more >> In a bid to drive down its ecommerce costs, Target (TGT) is opening up three new sortation centers. Two are in the greater Chicago area, one is in Denver. Online shopping now accounts for 20% of Targetās business. Focusing on distribution and warehousing is an ongoing focus for the ecommerce sector, which has seen the expansion of things like drone drop offs and third-party delivery companies. Read more >> The cost of attending college is more expensive than most people can afford to pay for in cash. But it still may be possible to figure out how to pay for college without loans. From scholarships to savings ā continue reading for 14 ways to make college tuition more affordable. Read more >>Not-So-Breaking News
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McDonald's (MCD) second-quarter revenue figures fell short of expectations, although the fast-food giant did top earnings estimates. Net sales fell due to Russian and Ukrainian restaurant closures, however, international growth helped fuel a 9.7% increase in global same-store sales.
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Coca-Cola (KO) quarterly earnings topped Wall Street estimates on both the top and bottom lines. The healthy beat was driven in part by sales at theaters, restaurants, and other venues that are still recovering from COVID-19.
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Thanks to a recovery in the aviation industry, General Electric (GE) posted a higher than expected quarterly profit on Tuesday. The industrial conglomerate reaffirmed, however, that its full-year results are likely going to come in at the low end of its projections due to inflation and supply-chain headwinds.
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After cutting profit projections due to inflation, Walmart's (WMT) shares fell, dragging down other retailers including Amazon (AMZ). Consumers appear to be spending less on discretionary items like electronics and more on staples like food.
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3M (MMM) is spinning off its health care division into a separately traded company. This division, which includes products like its bandages, skin adhesives, oral aligners, posted more than $8 billion in sales last year.
Financial Planner Tip of the Day
āAutomating savings can work, because itās easy to burn through cash idling in a checking account on unmemorable or unnecessary expenses throughout the month. Shifting the money away from the checking account can make it a little more difficult to spend those funds ā potentially stopping a bad financial habit before it starts.ā
Brian Walsh, CFPĀ® at SoFi