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The CML Close - Stocks down, Fed tomorrow, tech is OK, consumer spending is strong, home sales plummet - 07-26-2022




Date Published:



Markets
Stocks dropped ahead of the FOMC's interest rate decision tomorrow and Walmart's inflation warning that will impact earnings.

New homes sales plummeted and consumer confidence fell. 
Microsoft, Alphabet, and Visa reported earnings and the results were... pretty decent.

SPX 3,921.05 -45.79 (-1.15%)
NASD 11,262.57 -220.09 (-0.71%)
DJIA 31,761.54 -228.50 (-0.71%)
R2K 1,805.25 -12.53 (-0.69%)
VIX 24.69 +1.33 (+5.69%)
Oil 95.49 -1.21 (-1.25%)

Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Visa (NYSE:V) reported earnings that were better than feared for tech and strong for Visa.

• New home sales fell.

• Consumer confidence fell.

• Walmart issues earnings warnings.

• Tomorrow is Fed day.

Headlines of the Day
Stocks Fall After Walmart’s Earnings
The stock market fell Tuesday after Walmart warned that inflation would eat into its earnings as consumer spending habits changed.

Google Reassures Wall Street With Ad Business Showing Resilience
Google search ads weather storm hitting social media ads CFO Porat sees ‘broad-based strength in advertiser spend.

Microsoft earnings hurt by slowing PC sales, stronger dollar
Microsoft missed estimates for quarterly revenue on Tuesday, hurt by a stronger dollar, slowing sales of PCs and lower advertisement spending.

Visa reported a 33% rise in third-quarter profit on Tuesday, as the world's largest payments processor gained from robust consumer spending that shows no signs of a pullback despite worries of an economic downturn.

Walmart Sinks as Inflation-Weary Shoppers Temper Big Purchases
World’s biggest retailer reduces prices to clear merchandise. Lower earnings outlook shows inflation is hitting demand.

Investors Bet Fed Will Need to Cut Interest Rates Next Year to Bolster the Economy
In rare wager, investors expect a quick U-turn on rates: more increases this year, then cuts next year as economy weakens

Senate Bill to Boost Chip Production, Advanced Technology Set to Move Ahead
Supporters say measures needed for U.S. to maintain competitive edge, while foes say semiconductor firms should pay their own way.

Economic Data Results for 7-26-2022
United States New Home Sales
New home sales in the United States shrank 8.1% from a month earlier to a seasonally adjusted annual rate of 590,000 in June of 2022, well below market expectations of 660,000. It is the lowest reading since April of 2020.

Consumer Confidence
* July: 95.7 vs 97 est.
* Prior: 98.4 vs 100 est. (June)

Present Situation Index:
* 141.3 down from 147.2 last month.

Expectations Index:
* 65.3 from 65.8 last month

Richmond Fed Manufacturing Index JUL
The Richmond Fed composite manufacturing index remained flat in July, recovering from a revised -9 in June. Shipments and new order volume indexes increased to 7 and -10 from -17 and -20 in June, respectively, while the employment index dropped to 8 from 16 in the previous month. In the meantime, firms expected an improvement in the next six months and expected wages to remain elevated.

United States House Price Index MoM
The average prices of single-family houses with mortgages guaranteed by Fannie Mae and Freddie Mac in the US increased by 1.4% from a month earlier in May of 2022, easing from a downwardly revised 1.5% in the previous month.

Economic Data Due Tomorrow on 7-27-2022
FOMC Interest Rate Decision

Pending Home Sales MoM JUN

Wholesale Inventories MoM Adv JUN

Durable Goods Orders MoM JUN



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