LB Morning Call | Walmart’s Retail Rout Offers the Fed Food for Thought

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Asia Pacific

This morning, U.S. stock futures opened higher, Nasdaq futures rose 0.75%, S & P 500 futures rose 0.44%, and Dow futures rose 0.12%.

Overnight, the three major U.S. stock indexes closed lower across the board. The Dow fell 0.71% to 31,761.54 points, the S & P 500 fell 1.15% to 3,921.05 points, and the Nasdaq fell 1.87% to 11,562.58 points. Walmart lowered its earnings forecast, sending other retail stocks lower, fueling concerns that consumer spending may not be enough to lift the U.S. out of recession. The Federal Reserve will hold its monetary policy meeting starting today, with its interest rate decision announced early Thursday morning Singapore time.

Walmart fell 7.61% and Saiftse fell 4.11%, leading the Dow lower. Big tech stocks were lower across the board, with Apple down 0.88%, Netflix down 2.11%, Google down 2.32%, Facebook down 4.5% and Microsoft down 2.68%. Tesla fell 3.57%. Shopify fell 14.1%. Amazon fell 5.2%. Shares of Square parent Block and PayPal fell about 7.1% and 5.7%, respectively.

Retail stocks tumbled. Walmart shares fell 7.6%, Kohl's and Target fell 9.1% and 3.6%, respectively. Macy's general merchandise (Macy's) fell 7.2%. Nordstrom and Ross both fell more than 5%, while TJX Companies fell about 4.2%.

China's energy vehicle stocks fell, with NIO down 1.6%, Xiaopeng Motors down 0.33% and Li Auto Inc. down 3.03%.

Coinbase fell more than 21 percent on news that the Securities Exchange Commission was investigating whether the company improperly allowed users to trade digital assets that were supposed to be registered as securities.

US Stock News

1. Credit Suisse Group (CS) will announce the departure of Chief Executive Thomas Gottstein, sources said. Credit Suisse will announce Gottstein's departure as soon as Wednesday when it reports quarterly results.

2. E-commerce company Shopify announced that its e-commerce business is not growing as well as expected, so it will lay off about 1,000 people, accounting for 10 % of its global workforce.

3. General Motors' second-quarter revenue is $35.759 billion, and it is expected to be $33.58 billion; adjusted earnings per share are $3.29, and the market estimates $3.15; it is expected that the adjusted Earnings Before Interest and Taxes for the full year will 13 billion to $15 billion, maintaining the full-year net profit forecast 9.6 billion to $11.2 billion.

4. Coca-Cola's comparable earnings per share in the second quarter were US $0.7, and the market expected US $0.67; revenue was US $11.3 billion, and the market expected US $10.56 billion; net profit was US $1.91 billion, and the market expected US $2.81 billion.

5. McDonald's revenue in the second quarter 5.72 billion US dollars, the market is expected to 5.82 billion US dollars; net profit 1.19 billion US dollars, the market is expected to 1.69 billion US dollars; the same store sales in the second quarter increased by 9.7% year over year, and the expected increase is 7.5%.

6. Google's second-quarter earnings per share are $1.21 and expected to be $1.32. Revenue is $69.69 billion, expected to be $70 billion. Net profit is $16.002 billion, expected to be $17.439 billion. Operating margin is 28%, expected to be 28.4%. Google Cloud revenue is $6.28 billion, expected to be $6.32 billion. Google advertising revenue is $56.29 billion and expected to be $55.91 billion. Google's U.S. stock rose more than 2% after hours.

7. Microsoft's fourth-quarter earnings per share are $2.23 and expected to be $2.29. Revenue is $51.9 billion, up 12% year over year, expected to be $52.45 billion; net profit is $16.7 billion, expected to be $17.345 billion. Smart cloud revenue is $20.91 billion, expected to be $21.07 billion; Azure cloud computing service growth slows to 40%. Microsoft shares fell more than 2% after hours.

8. Twitter will hold a shareholder meeting on September 13 to vote on Elon Musk's $44 billion acquisition.

9. According to the media, Meta Platforms has raised the price of the VR headset Quest 2 by about $100. From August, the prices of the 128GB and 256GB versions of the VR headset Quest 2 will be raised to $399.99 and $499.99, respectively.

Singapore News

1. CapitaLand China Trust announced its results. The distributable income was 68.7 million yuan, an increase of 7.2% year over year. After retaining the funds, the dividend per unit was 4.1 cents, a decrease of 3.1% year over year.

2. Keppel REIT's distributable income in the first half of this year increased by 4.6% year over year to 100 million 10.5 million yuan, and the dividend per unit (DPU) also increased by 1% year over year to 2.97 points, mainly due to the acquisition of Keppel Bay in May last year. Contribution from the Keppel Bay Tower.

3. Frasers Centrepoint Trust reported that tenant sales in nine neighborhood malls increased by 23% year over year in the third quarter, about 10 % higher than pre-epidemic levels. Every 50 basis point increase in the S $swap rate (SOR)/S $overnight rate (SORA) is estimated to result in a 0.170 cent reduction in dividends per unit for the full year.

Macroeconomy

1. The IMF released the latest "World Economic Outlook Report", and lowered its global economic growth forecast for the third time in a row this year. It is expected that the global economy will grow by 3.2% and 2.9% respectively this year and next, down 0.4 and 0.7 percentage points from the April forecast respectively. Among them, the economic growth rate of the United States has been lowered by 1.4 and 1.3 percentage points this year and next to 2.3% and 1%.

2. According to the CME "Fed Observation", the probability of the Fed raising interest rates by 75 basis points in July is 75.1%, and the probability of raising interest rates by 100 basis points is 24.9%; by September, the cumulative rate hike of 75 and 100 basis points The probability is 0%, the probability of accumulating 125 basis points is 51.1%, the probability of accumulating 150 basis points is 41%, and the probability of raising interest rates is 175 The probability of the basis point is 8%.

3. LONGi Green Energy and Tongwei Solar Energy both increased their prices. Among them, the price of LONGi Green Energy P-type monocrystalline silicon wafers increased by 0.24-0.25 yuan, and the price of Tongwei solar cells increased by 3.17%-4.07%.

4. LG New Energy is expected to temporarily stop the development of prismatic batteries, focusing on existing bag and cylindrical batteries.

5. South Korea's SK Group, which includes the world's second-largest memory chip maker SK Hynix and SK Innovation, will announce a new $22 billion investment in U.S. manufacturing, the White House said.

Reminders

20:30, US durable goods orders for June