Wall Street opens lower as Walmart warning rattles retail stocks

Wall Street’s major indexes fell at the open on Tuesday after Walmart’s profit warning heightened fears in the retail sector that consumers were cutting back on discretionary spending in the face of rampant, decades-high inflation.

Reuters:

Walmart Inc’s shares slumped 9.5% in premarket trading, while Target and Amazon.com fell 3.3% each, souring the mood in what is set to be the busiest week of the earnings season.
“It’s not a surprise, this is what normally happens when inflation is so high or when consumers are having trouble paying their bills,” said Eugenio J. Alemán, chief economist at Raymond James. “People start to become very discriminating in consumption, so basically they reduce the purchases of discretionary items in favor of necessities.”
Along with high inflation, a stronger dollar is also expected to weigh on profits of companies with sprawling global operations.
High-growth companies such as Apple Inc, Netflix Inc, Tesla Inc, fell between 0.2% and 1%, while Alphabet Inc and Microsoft Corp dropped about 0.2% each ahead of their quarterly reports after market close.

MacDailyNews Take: Unfortunately, in an indictment of our education “system,” for new generations, tough lessons have to be retaught and learned the hard way.
As we slog through this malaise, remember: It’s always darkest before the dawn.
‘Tis best to get a handle on inflation, if you know how, while you still can. – MacDailyNews, May 11, 2021
Stop the misguided crusade against domestic energy production and profligate federal spending and inflation will be stopped dead in its tracks. It’s not difficult. – MacDailyNews, May 11, 2022
In January, Interactive Brokers founder Thomas Peterffy said, “Inflation is 7% — 1% or 2% [in interest rate hikes] doesn’t mean anything. If they really wanted to stop inflation, they would have to raise rates to 4%, 5%, 6%.”
Inflation is repudiation. — Calvin Coolidge
When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill… [which] comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan
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