Wall Street points lower with more retail data on the way

TOKYO

Wall Street was pointing to declines before Wednesday’s open, as Target reported a large decline in profits on Wednesday. Target also posted July retail sales data.

Futures for the S&P 500 slipped 0.8% and futures for the Dow fell 0.6%.

Target fell almost 2% after reporting a nearly 90 percent plunge in second quarter profits. Target was forced to reduce prices to clear unneeded inventories.

Target warned earlier this year that it would cancel suppliers orders and reduce prices due to an aggressive spending shift by Americans during the pandemic.

Wednesday’s U.S. Commerce Department data will be released on July retail sales. Economists polled by FactSet expect modest 0.2% growth compared to June’s sales increase of 1%.

Analysts warn of major risks, including surging COVID-19 rates in Asia and concerns about global inflation, as well as China’s efforts to combat infections.

“Economic growth expectations in China and the U.S. are likely to remain key indicators of recession fears.” China’s zero COVID’ policy continues to be a significant headwind to global economic growth. said Anderson Alves at ActivTrades

Japan’s benchmark Nikkei225 rose 1.2% to 29,222.77. Australia’s S&P/ASX 200 rose 0.3% to 7,127.70. South Korea’s Kospi dropped 0.5% at 2,521.84. Hong Kong’s Hang Seng increased 0.5%, to 19,922.45, while Shanghai Composite rose 0.5%, to 3,292.53.

France’s CAC 40 dropped 0.6% in Europe midday trading while Germany’s DAX fell 1.2%. The FTSE 100 in Britain lost 0.4%

As part of its fight against inflation, New Zealand’s central bank increased its benchmark interest rate to 3% from 2.5% to 3.5%. The Reserve Bank of New Zealand said In spite of global and local headwinds, domestic spending had been resilient and employment was high. Inflation had been somewhat reduced by lower oil prices, according to the bank saidHowever, it had to continue tightening its monetary conditions until inflation returned to its target range (1% to 3%).

New Zealand’s inflation rate is 7.3%, and its unemployment rate is 3.3%.

Japan’s government data shows a trade deficit for July, the 12th consecutive month. The key factors were high oil prices and a sliding yen. Japan imports almost all of its oil.

As economic restrictions ease, new COVID-19 cases have increased in recent weeks. Ambulances were forced to travel for hours in search of hospitals that could take patients. But domestic travel Consumers are seeing a return to shopping and other retail activities, which should boost their consumption.

As traders carefully reviewed the mostly positive financial results of major U.S. retailers, market volatility was evident. The U.S. stock market saw its best month in over a year in July, and this winning streak continues into August. This is partly due to hopes that inflation will ease. According to the latest government report, inflation has essentially stagnated between June and July.

Recent results from retailers indicate that American consumers still face the most severe inflation in over 40 years. However, spending is solid. Wall Street is concerned that rising prices for everything, from food and clothing to consumer spending could cause a slowdown in the economy’s main engine for growth.

Retail reports have just finished their latest round of corporate earnings. Investors are closely watching to assess the impact of inflation on consumers and businesses, as well as to gauge the U.S. Federal Reserve’s reaction.

Although the central bank will raise interest rates to slow down economic growth, rein in inflation and curb inflation, it could also risk putting too much pressure on the economy and leading to a recession.

In July, the Fed increased its benchmark interest rate by three quarters of a percentage point for the second straight time. Wall Street will learn more about the decision behind it when the Fed releases minutes. CME’s FedWatch Tool shows that investors are expecting a half-point rise at the Fed’s August meeting.

Energy trading saw benchmark U.S. crude oil drop 6 cents to $86.47 per barrel. U.S. crude oil prices fell 3.2% Tuesday. Brent crude oil, which is the international standard for oil, fell 47 cents per barrel to $91.87.

The U.S. dollar increased to 135.08 Japanese Yuan from 134.22 Yoen in currency trading. Euros cost $1.0166, a drop of $1.0171