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What’s happening: Shares of Walmart gained on Tuesday, after the company released results for the third quarter.
What happened: The big box retailer reported better-than-expected earnings for the latest quarter.
Walmart also raised its guidance for the full year for the third consecutive time.
How were the results: The company reported single-digit sales growth for the third quarter.
Why it matters: Although inflation has remained sticky lately, it continues to ease, boosting the purchasing power of customers and resulting in higher demand for retailers.
Walmart said global ecommerce sales grew by 27% in the quarter, driven by store-fulfilled pickup and delivery. Global advertising business jumped 28%.
Walmart US same-store sales, excluding fuel, climbed 5.3% year-over-year, driven by upbeat growth in the merchandise categories and physical and digital channels. Same-store sales, excluding fuel, at Sam’s Club gained 7.0% year-over-year, amid a surge in food and health and wellness categories.
“In the U.S., in-store volumes grew, pickup from store grew faster, and delivery from store grew even faster than that,” CEO Doug McMillon said.
With customers increasing their budget for merchandise and groceries, Walmart raised its annual outlook for the third straight time. This signalled that the retailer continues to gain market share ahead of the all-important holiday season.
Management raised their sales growth guidance (at constant currency) for fiscal 2025 to 4.8%-5.1%, from the previous outlook of 3.75%-4.75%. They guided to earnings of $2.42-$2.47 per share, versus their previous forecast of $2.35-$2.43 per share.
How shares responded: Walmart’s shares rose 3% to close at $86.60 on Tuesday, following the release of quarterly earnings. The stock has jumped around 63% year to date.
What to watch: Investors will continue monitoring policies from upcoming President Donald Trump, which could impact overall consumer spending. Trump’s proposed tariffs on imports, mainly from China, are expected to increase the price of several products in the US, including toys, clothing and footwear.
Context: The GBP/USD forex pair rose on Tuesday, amid weakness in the US dollar.
Details: Investors assessed another escalation in the ongoing war between Russia and Ukraine after Russia lowered the threshold to use nuclear weapons just days after outgoing President Joe Biden’s administration allowed Ukraine to fire US missiles into Russia.
Rising geopolitical tensions provided a boost to the safe-haven US dollar, which exerted pressure on the GBP/USD forex pair earlier in the session. However, the US dollar pared gains later, closing the session lower. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell slightly to 106.21 on Tuesday.
The GBP/USD forex pair edged higher to 1.2681 on Tuesday, while the EUR/GBP fell slightly to 0.8357.
London’s FTSE 100 Index shed 0.13% to close at 8,099.02, while the domestically focused FTSE 250 gained 0.16% to settle at 20,427.62.
What to watch: Investors await the release of economic data on inflation rate, producer price index and retail price index from the UK today. Annual inflation rate in the UK, which eased to 1.7% in September to hit the lowest level since April 2021, is expected to rise back to 2.2% in October.
Analysts expect producer price inflation to ease by 0.1% in October, following a 0.5% decline in the previous month. The Retail Price Index, which rose by 2.7% year-over-year in September, is projected to increase by 3.4% in October.
Other Markets: US trading indices closed mixed on Tuesday, with the S&P 500 and Nasdaq 100 up by 0.40% and 0.71%, respectively, and the Dow Jones index down by 0.28%.
Russia said that Ukraine’s use of the long-range Army Tactical Missile System signalled a “new phase” of the war against Moscow. The news sent the RUB/USD pair lower in forex trading this morning.
The People’s Bank of China kept its key lending rates unchanged at the November fixing, lending support to the CNY/USD forex pair.
Japan’s trade deficit narrowed to ¥461.25 billion in October, from ¥702.86 in the year-ago month. However, the latest reading missed market expectations of ¥360.4 billion, which sent the JPY/USD pair lower in forex trading this morning.
South Korea’s producer inflation rose by 1% year-over-year in October. The pace of inflation being the same as in the previous month lent support to the KRW/USD forex pair.
Canada’s annual inflation rate accelerated to 2% in October, from of 1.6% in September. The latest reading came in higher than market expectations of 1.9%, sending the CAD/USD pair lower in forex trading this morning.
Germany’s producer prices, Indonesia’s loan growth and Bank of Indonesia’s interest rate decision, South Africa’s inflation rate, retail sales and RMB/BER business confidence index, Italy’s construction output, Eurozone’s construction output and negotiated wage growth, US MBA mortgage applications, crude oil inventories, gasoline stocks change and distillate stocks, Russia’s producer price inflation, Turkey’s government debt, as well as Argentina’s leading economic index and balance of trade.
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