Walmart gives big clue on chance of US recession - days after grim warning from Home Depot

By Alice Wright For Dailymail.Com

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Walmart today boosted hopes that the US will avoid a recession - saying it expected bumper sales for the rest of the year after a strong second quarter. 

It was a surprising - and welcome - update after Home Depot gave a more grim outlook earlier this week. 

It also comes after worrying jobs data in recent weeks sent the stock market crashing.

Walmart, often seen as a bellwether for the overall economy, accounting for $1 in every $12 spent in the US shops, said its US sales rose 4.2 percent in the three months ending in June.

The figures were above what analysts had expected, sending the stock up more than 6 percent in early trading. 

US stocks close positive after robust economic data

The S&P 500 closed 1.6 percent higher, regaining all of the index's losses this month.

The tech-heavy Nasdaq leapt 2 percent after signs the US economy will avoid recession.

13:41

Walmart’s strong second quarter leads to raised expectations for rest of the year

Walmart's second quarter saw strong profit and sales, CEO Doug McMillon told analysts on Thursday's earnings call.

The chain was ‘not seeing a weaker consumer overall,’ McMillon said.

Walmart shares rose more than 6 percent in early trading on the news.

The stock is up more than 30 percent year to date.

18:53

Stocks continue to climb on economy optimism

The S&P 500 climbed more than 1.5 percent by Thursday afternoon after retail sales beat expectations.

The Nasdaq leapt around 2.3 percent as economic data, including reduced jobless figures and an improved outlook from Walmart, dispelled fears of the US tipping into recession.

Analysts are now hopeful the Fed will begin to cut interest rates in September.

16:31

Home Depot’s grim warning on the economy appears to have been allayed

Home Depot yesterday warned that consumers were feeling the squeeze of higher interest rates and had pulled back on home improvement spending as a result.

The hardware giant’s sales slumped 3.6 percent in the last quarter, raising concerns the US economy was heading for recession.

However, today’s Walmart and jobless figures suggest otherwise, with analysts pointing to a much rosier picture with possible rate cuts on the horizon.

epa11546898 Sales associates at The Home Depot in Alexandria, Virginia, USA, 12 August 2024. Home Depot will report earnings before the markets open on 13 August 2024, with analysts expecting modest declines in sales and profits as consumers continue to rethink large home improvement projects. EPA/SHAWN THEW

15:39

Data shows its appropriate for Fed to cut rates soon, analyst says

'We’re back to an environment where good news is good news and bad news is bad news,' Bret Kenwell from eToro said of the latest data.

'Investors and consumers want inflation to go lower, but not at the expense of the economy. Today’s stronger-than-expected retail sales figure quiets some of the recent fears that the US may be slipping into a recession.'

'After a weak payrolls report, there were worries that the Fed waited too long to cut rates,' he added.

'While it would still be appropriate for the Fed to lower rates next month, today’s reports should buy them some time until the September meeting.'

2MXC9DW Washington, DC, USA. 1st Feb, 2023. Federal Reserve Chairman Jerome Powell speaks at a press conference in Washington, DC, on Wednesday, Feb. 1, 2023. The Federal Reserve raised its target interest rate by a quarter of a percentage point on Wednesday, yet continued to promise "ongoing increases" in borrowing costs as part of its still unresolved battle against inflation. Credit: Yuri Gripas/Abaca Press/TNS/Alamy Live News

14:31

Stocks rise in first hour of trading after doom and gloom appears to dissipate

It's been a rocky few weeks for markets but today’s economic data appears to have added some cheer.

The S&P 500 rose 1.1 percent and the Nasdaq rose 1.8 percent in early trading on the back of positive sales and falling jobless data.

Jobless claims have fallen to their lowest level since early July.

NEW YORK, NEW YORK - AUGUST 12: Traders work on the floor of the New York Stock Exchange during morning trading on August 12, 2024 in New York City. Stocks began to slip after the opening bell as the market awaits key inflation data after a week of volatility amid a global market sell-off centered around fears of a U.S. recession. (Photo by Michael M. Santiago/Getty Images) *** BESTPIX ***

13:42

US retail sales beat forecasts, showing stronger than expected consumer

US retail sales rose 1 percent in July, the most since January 2023.

The data suggests fears of a weaker consumer have been overblown, a positive marker for the overall economy.

The value of retail purchases increased 1 percent, and sales minus autos and gasoline were up 0.4 percent, according to the Commerce Department.

Car sales, electronics and appliances made strong gains.

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