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Here are five key things that may affect trading on Thursday.
A ‘MILD RECESSION’ IS HERE: Schork Group director Stephen Schork warned on Monday that the United States is experiencing a “mild recession” and the “drag” on energy prices will be greater as the severity of the downturn deepens.
“We know we have runaway inflation,” Schork noted Monday, arguing that there are “only two ways to attack inflation,” by building supply or destroying demand.” He stressed that as far as building supply is concerned, In terms of energy, the market needs more oil, natural gas and fossil fuels.
“The same goes for food. We’re in a tough situation where we’re not producing enough food, especially when we see this fall harvest and because of the manipulation of this market.”
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Schork Group CEO Stephen Schork discusses the energy markets, arguing that the US is already in a “mild recession”. (iStock)
THE PINCH OF INFLATION: On Monday, Walmart cut its second-quarter and full-year profit forecast, saying rising inflation was weighing on the retail giant. The news sent Walmart shares tumbling after the closing bell. The company said it expects second-quarter adjusted earnings per share to fall to around 8 or 9% and fall to a range of 11 to 13% for fiscal 2023.
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Ticker Security Last Change Change % WMT WALMART INC. 132.02 -0.19 -0.14%
FED MEETING STARTS: The two-day FOMC meeting, the Federal Reserve’s fifth policy meeting of the year, begins Tuesday morning. It concludes on Wednesday afternoon with the interest rate decision, the policy statement and the press conference following the meeting with Fed Chairman Jerome Powell.
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This May 4, 2021 file photo shows the Federal Reserve Building in Washington. (AP Photo/Patrick Semansky, File/Associated Press)
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 will be the central bank’s second consecutive 75-basis-point interest rate hike (June was the first 75-basis-point hike since November 1994), following a half-point increase in May and a quarter-point increase in March. The funds rate was previously in the 0%-0.25% range following two emergency rate cuts in March 2020 in response to the global pandemic.
HUGE EARNINGS REPORT DAY: Five Dow members are scheduled to report second-quarter earnings — 3M, Coke and McDonald’s in the morning and Microsoft and Visa after the close. Before the unveiling, auto maker General Motors, industrial conglomerate General Electric, health insurer Centene, package delivery powerhouse United Parcel Service, aerospace and defense heavyweight Raytheon Technologies and homebuilder Pulte Group, to name a few.
After the closing bell, Alphabet’s Microsoft and Google are scheduled to report. Microsoft is expected to say fiscal fourth-quarter earnings per share rose 5.7 percent from a year earlier to $2.29 on a 14 percent jump in revenue to $52.44 billion. Microsoft divides its operations into three main segments: Intelligent Cloud (Azure, SQL and Windows Servers), More PCs (Windows, Xbox, Surface and PC accessories) and Productivity and Business Processes (Office 365, Skype, LinkedIn).
BIDEN SAYS ‘WE’RE NOT GOING TO BE IN A RECESSION’ AHEAD OF GDP NUMBERS: ‘YES TO GOD’
Ticker Security Last Change Change % MMM 3M CO. 134.12 0.00 0.00%COKE COCA COLA CONSOLIDATED 494.11 -2.76 -0.56%MCD MCDONALD’S CORP. 250.38 -3.61 -1.42%MSFT MICROSOFT CORP. 258.83 -1.53 -0.59%VISA INC. 0.57 +0.27%
HOME PRICES, HOME SALES, CONSUMER CONFIDENCE: At 9 a.m. ET, the May home price report will be released. There was no estimate for the non-seasonally adjusted 20-city index, but economists polled by Refinitiv expected the seasonally adjusted index to rise 1.5% on a monthly basis.
For the year, home price growth, as measured by the 20-city index, is expected to cool to 20.6 percent, down from a record annual increase of 21.2 percent in April. At 10 a.m. ET, the Census Bureau is expected to report that sales of new single-family homes fell 5.2 percent in June to a seasonally adjusted annual rate of 660,000. That would be the fifth decline in six months, as on -high mortgage rates and record high prices are shutting many homebuyers out of the market. For context, April’s reading of 629,000 was the lowest in two years.
A home is for sale in Geneva, Illinois, June 23, 2009. (REUTERS/Jeff Haynes/Reuters Photos)
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Also at 10 a.m. ET, the Conference Board will release its consumer confidence index for July. It is expected to fall a point and a half, the third straight monthly decline, to 97.2, the lowest level since February 2021. Confidence has fallen sharply from a post-pandemic peak of 128.9 in June last year on inflation concerns.
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