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Denis Sergienko • 2022-07-28

Walmart Cuts Forecasts, which Leads to Stock Futures Fall

Walmart Cuts Forecasts, which Leads to Stock Futures Fall

Today’s morning came up with frustrated stock futures falling as Walmart announced to cut its profit forecasts. As a result, retail stocks tumbled to the premarket featuring the DJIA falling by 146 points with Nasdaq and S&P declining by 0,3% each.

The announcement was released later the previous day. While the food inflation keeps rising, Walmart decided to cut both quarterly and annual profit estimates keeping retail stock investors alarmed. The news caught traders by surprise, especially when taking into account some of the stock futures making the biggest increase since last October.

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Experts say, the time for investing disappointment has only started. Earning frustration will continue until the end of 2022 and the beginning of 2023.

Saw materials costs are getting higher, the prices are soaring, and labor costs are also growing in some sectors. As a result, we are about to observe the margin squeeze. What’s more, other sectors are also showing a rapid decline making big players reduce their profit estimates. For instance, General Motors co, reported a weaker second quarter compared to what analysist predicted earlier.

Investors still expect reports from other big and influential players including McDonald’s. Coca Cola, Visa, Microsoft, and other companies that are about to announce their profit estimates in a few hours. Then, we are likely to see the whole picture of how the next stage of the earning season will look considering it has already started giving a backdrop.