STOCK MARKET NEWS: Walmart, GM shares tank, Fed kicks off meeting, home sales steady
Traders take in housing, consumer, earnings reports, 2-day FOMC meeting. FOX Business is providing real-time updates on the markets, commodities and all the most active stocks on the move.
Coverage for this event has ended.
Shares of Chipotle Mexican Grill rose after the markets closed. The fast-casual restaurant chain said comparable restaurant sales grew 10% in the quarter ending in June. Operating income surged 37.5%. The company plans 235 to 250 new restaurant openings this year assuming construction, permit and material supply delays don't worsen.
| Symbol | Price | Change | %Change |
|---|---|---|---|
| WMT | $121.97 | -10.00 | -7.58% |
All three of the U.S. benchmark stock averages lost ground as investors reacted to a basket of disappointing earnings led by Walmart which cut its profit forecast due to inflation pressures. Shares were the worst Dow member dragging down consumer discretionary stocks which weighed on the S&P 500 and Nasdaq Composite with declines in Bed Bath and Beyond, Amazon and Dollar Tree shares. In commodities, oil slipped 1.8% to $94.98 per barrel.
| Symbol | Price | Change | %Change |
|---|---|---|---|
| BBBY | $5.04 | -0.07 | -1.37% |
| AMZN | $121.14 | -1.28 | -1.05% |
| DLTR | $168.42 | -3.59 | -2.09% |
| ROST | $82.63 | -0.61 | -0.73% |
Investors dumped retail and consumer discretionary stocks after Walmart cut its profit outlook due to rising inflationary pressures. Bed, Bath and Beyond, Amazon, Dollar Tree and Ross Stores took a beating.
President Emeritus and Senior Policy Advisor at the Tax Foundation Scott Hodge shares his thoughts on a possible recession and how young people are reacting to the economy
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Surevest CEO Rob Luna looks ahead to Apple, Amazon and Meta stock earnings this week.
| Symbol | Price | Change | %Change |
|---|---|---|---|
| SHOP | $36.71 | -0.64 | -1.71% |
Shopify Exteriors
Shopify CEO Tobias (Tobi) Lutke delivered painful news to his employees, some of which will be laid off today. In his letter he described the rapid rise and fall of demand due to the pandemic and how that is reshaping the online commerce site he founded.
"All this makes this email so much harder to write: the next part of the journey will involve fewer teammates than we have picked up along the way. Shopify has to go through a reduction in workforce that will see about 10% leave by the end of the day. Most of the impacted roles are in recruiting, support, and sales, and across the company we’re also eliminating over-specialized and duplicate roles, as well as some groups that were convenient to have but too far removed from building products. Emails will go out in the next few minutes that will clarify if your role was affected; those impacted will then have a meeting with a lead in their team" a portion of the letter states" a portion of the letter stated.
READ: Full Letter Here
| Symbol | Price | Change | %Change |
|---|---|---|---|
| WMT | $132.02 | -0.19 | -0.14% |
| GM | $34.52 | -0.15 | -0.43% |
| SP500 | $3,945.38 | -21.46 | -0.54% |
| I:COMP | $11,659.55 | -123.12 | -1.04% |
U.S. stocks fell across the board pressured by Walmart, which cut its profit outlook due to inflation and General Motors, which saw profits sink tied to the supply chain crisis. This as the Federal Reserve begins its two-day meeting. In commodities, oil rose 1% to the $98 per barrel level.
Walmart shares tumbled after inflation pressures forced the nation's largest retailer to cut profit forecasts.
https://www.foxbusiness.com/markets/walmart-cuts-full-year-profit-forecasts-citing-inflation
| Symbol | Price | Change | %Change |
|---|---|---|---|
| MMM | $134.12 | 0.00 | 0.00% |
A sign at 3M's headquarters
3M announced on Tuesday that it will spin off its health care business into a separate public company.
"The decision to spin off our Health Care business will result in two well-capitalized, world-class companies, well positioned to pursue their respective priorities," 3M CEO Mike Roman said in a statement.
GM CEO Mary Barra
The Detroit automaker reported second-quarter net income of $1.7 billion, or $1.14 a share, down from $2.8 billion, or $1.90 a share, in the year-earlier quarter. Analysts had expected $1.20 a share.
GM CEO Mary Barra said the company is preparing for a possible slowdown.
"There are concerns about economic conditions, to be sure," she said in a shareholder letter.
The three major cryptocurrencies -- Bitcoin, Ethereum and Dogecoin -- were all trending lower early Tuesday morning. (Getty Images)
Cryptocurrency prices were trending lower early Tuesday morning.
At approximately 4 a.m. ET, Bitcoin was trading at nearly $21,075 (-1.24%), or lower by almost $265.
For the week, Bitcoin was trading lower by nearly 4.35%. For the month, the cryptocurrency was also lower by slightly more than 0.50%.
Ethereum was trading at approximately $1,400 (-2.28%), or lower by nearly $33.
For the week, Ethereum was trading lower by about 8%. However, for the month, it was trading higher by more than 16%.
Dogecoin was trading at 0.06153 (-1.29%), or lower by approximately $0.0008.
For the week, Dogecoin was lower by more than 7.5%. For the month, the crypto was lower by nearly 8.75%.
President Biden is hopeful the country is not 'coming into a recession' as he awaits the latest GDP figures. (AP)
President Biden on Monday said, "God willing," the United States is "not coming into recession," ahead of the upcoming report that could show another negative GDP quarter.
Biden, who is recovering from COVID-19, took questions virtually from reporters on Monday.
The president was asked how worried Americans should be about a looming recession, as the Biden administration waits for the GDP report amid recession fears.
"We're not coming into recession, in my view," Biden said Monday, saying that the unemployment rate "is still the lowest we’ve had in history to the 3.6 area."
"We still find ourselves with people investing," Biden said. "My hope is we go from this rapid growth to a steady growth, and so we'll see — we’ll see some coming down."
"But I don't think we're going to — God willing — I don't think we're going to see a recession," Biden said. Recessions refer to two consecutive quarters of negative economic growth.
For the past seven weeks, gasoline prices nationwide have dropped since a June 14 record high of $5.016. (gasprices.aaa.com)
The average price of a gallon of gasoline slipped almost 3 cents a gallon Tuesday morning to $4.327, according to AAA.
Gas prices nationwide were $4.355 on Monday and $4.366 on Sunday.
Prices have been on the decline since hitting a high of $5.016 on June 14, seven weeks ago.
One week ago, the average price of a gallon of gasoline was $4.495. One month ago, that same gallon of gasoline was $4.90. One year ago, a gallon of gasoline was $3.156 according to AAA.
Diesel prices dropped as well early Tuesday with the national average for a gallon of diesel at $5.386. A gallon of diesel was $5.412 on Monday.
A week ago, a gallon of diesel sold for $5.515. A month ago, that same gallon of diesel sold for $5.797. One year ago, a gallon of diesel cost $3.274, AAA reported.
U.S. markets were lower early Tuesday morning as investors await a decision by the FOMC regarding interest rates. A decision will be announced Wednesday afternoon. (AP)
| Symbol | Price | Change | %Change |
|---|---|---|---|
| I:DJI | $31,990.04 | +90.75 | +0.28% |
| SP500 | $3,966.84 | +5.21 | +0.13% |
| I:COMP | $11,782.67 | -51.45 | -0.43% |
U.S. stocks were trading lower early Tuesday morning as investors await the Federal Reserve's expected decision to raise interest rates when the two-day FOMC meeting begins.
U.S. stocks swung between small gains and losses Monday for global markets, with investors awaiting a slew of corporate earnings reports.
The S&P 500 added 5.21 points, or 0.1%, to 3966.84. The Dow Jones Industrial Average gained 90.75 points, or 0.3%, to 31990.04. The tech-heavy Nasdaq Composite Index lost 51.45 points, or 0.4% to 11782.67. So far investors have largely brushed off disappointing earnings.
Shares of S&P 500 companies that missed Wall Street's forecasts have fallen 0.2% on average in the two days before their report through the two days after, according to FactSet. That compares with the five-year average of a 2.4% decline.
The Fed gathering, the fifth policy meeting of the year, will conclude Wednesday afternoon with the rate decision, policy statement and post-meeting press conference with Fed chairman Jerome Powell.
The Fed is widely expected to raise the Federal Funds rate by three-quarters of a percentage point to a range of 2.25%-2.5%. It would be the central bank’s second consecutive 75-basis point rate hike (June saw the first 75 bps hike since November 1994), following a half-point hike in May and a quarter-point increase in March. Previously, the Funds rate had been in a 0%-0.25% range following two emergency rate cuts in March 2020 in response to the global pandemic.
Tuesday will also bring a flurry of economic reports, kicking off with May home prices. That will be followed by the Census Bureau report expected to say sales of new single-family homes fell 5.2% in June to a seasonally adjusted annual rate of 660,000. That would be the fifth decline in six months as higher mortgage rates and record-high prices shut many homebuyers out of the market. For context, April’s reading of 629,000 was the lowest in two years.
Lastly, the Conference Board will release its consumer confidence index for July. It’s expected to fall a point and a half, the third straight monthly decline, to 97.2, the lowest since February 2021. Confidence is down sharply from a post-pandemic high of 128.9 in June of last year on inflation concerns.
Meanwhile, Asian stock markets were mostly higher Tuesday as investors braced for the Fed’s hike to cool inflation.
Shanghai, Hong Kong and Seoul advanced. Tokyo edged lower. The Shanghai Composite Index rose 0.8% to 3,276.71 while the Nikkei 225 in Tokyo shed less than 0.1% to 27,680.41. The Hang Seng in Hong Kong gained 1.5% to 20,868.29.
The Kospi in Seoul added 0.2% to 2,408.60 after the government reported the South Korean economy grew by a stronger-than-expected 0.7% over the previous quarter in the three months ending in June.
Sydney's S&P-ASX 200 was 0.1% higher at 6,798.00. India's Sensex opened down 0.7% at 55,365.32. New Zealand retreated while Southeast Asian markets gained.
A tightening of Europe's oil, brought about by Russia cutting supply to Germany via the Nord Stream 1 pipeline, has raised oil prices for the second straight day. (Getty Images)
| Symbol | Price | Change | %Change |
|---|---|---|---|
| USO | $76.22 | +1.69 | +2.27% |
| CVX | $148.48 | +4.29 | +2.98% |
| XOM | $89.98 | +2.90 | +3.33% |
Oil prices rose on Tuesday for a second day on increasing concerns about tightening European supply after Russia, a key oil and natural gas supplier to the region, cut gas supply through a major pipeline.
Brent crude futures for September settlement rose $1.66, or 1.6%, to $106.81 a barrel by 0618 GMT, extending a 1.9% gain in the previous day.
U.S. West Texas Intermediate (WTI) crude futures for September delivery increased $1.47, or 1.5%, to $98.17 a barrel, having gained 2.1% on Monday.
Russia tightened its gas squeeze on Europe on Monday as Gazprom said supplies through the Nord Stream 1 pipeline to Germany would drop to just 20% of capacity.
Russia's cut in supplies will leave countries unable to meet its goals to refill natural gas storage ahead of the winter demand period.
Germany, Europe's biggest economy, faces potentially rationing gas to industry to keep its citizens warm during the winter months. This could prompt end-users to swap their gas for oil products, particularly diesel.
But this also carries risks since Russia supplies most of the region's diesel fuel and prices for drivers who depend on the fuel are expected to rise.
Europe's crude, oil product and gas supplies have been disrupted by a combination of Western sanctions and payment disputes with Russia since its Feb. 24 invasion of Ukraine, which Moscow calls a "special military operation."
Still, falling demand because of recent high crude and fuel prices and the expectation of an increase in interest rates in the United States have put pressure on prices.
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