1,164 points today…..
3.6% of the Market value….
Inflationary price increases are forcing consumers to spend less money….
Big store retailers are seeing drops in sales….
Suppliers’ efforts to get back profits form pandemic months and energy costs seems to be coming back to bite things….
Higher interst rates don’t help….
People and institutions ARE losing money….
The ‘Market’ isn’t the economy itself….
But is IS part of it….
And one could come to think that a recession isn’t far behind us….
Things are NOT being kind to Joe Biden…..
And the American Consumer….
A short reprieve for investors ended abruptly on Wednesday as stocks had their worst day yet in a series of already ugly drops after shrinking profits by major retailers reignited Wall Street’s fear of high inflation.
The S&P 500 fell 4 percent, its biggest drop since June 2020 and its fourth decline of more than 3 percent in less than a month, erasing gains in the index since late last week. The tech-heavy Nasdaq composite dropped 4.7 percent.
Retailers led the decline. Target plunged 24.9 percent, making it the worst performer in the S&P 500, after the company reported on Wednesday that high costs affected its profits in its latest quarter. It also lowered its forecast for the year.
The warning echoed a similar report from Walmart, which said on Tuesday that its profit fell 25 percent from a year ago in the quarter and also issued a grim forecast. It was down 6.8 percent on Wednesday after falling more than 11 percent the day before….
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“Consumers are weathering the inflation hit,” Fiona Cincotta, a senior financial markets analyst at Forex.com, wrote in a note. “Retailers, however, are not doing so well at navigating through 40-year high inflation.”
Rising prices elsewhere may help TJX, which owns discount brands including T.J. Maxx, Marshalls and HomeGoods. It was one of just seven gainers in the S&P 500 on Wednesday, rising 7.1 percent, after it reported that profit rose a better-than-expected 10 percent in the three months through April…
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“Wall Street was anticipating that we were going to see a peak of inflation a month ago,” said Edward Moya, a senior market analyst at Oanda. “Earnings season is telling us that these pricing pressures are not easing and that consumers should expect higher prices moving forward. That will force the Fed into a difficult decision where they might have to tighten more aggressively, and that could weigh on economic growth.”
Jerome H. Powell, the chair of the Fed, said on Tuesday that the central bank would “have to consider moving more aggressively” if policymakers don’t see clear indications that inflation is cooling…..
The squeeze of inflation on discretionary incomes is starting to affect what consumers buy. Because Americans were having to spend more on food, they cut back on clothing and home furnishings more than Walmart had expected. Unseasonably cool weather, affecting items such as apparel and patio furniture, didn’t help either.
Walmart isn’t the only retailer to feel the pinch of high prices. While Home Depot Inc. reported better-than-expected first-quarter sales and saw an 11% increase in the average amount that each consumer spent in the first quarter, the number of customer transactions fell by 8%….