US stock futures subdued after Walmart earnings better than feared

US stock futures were subdued on Tuesday after retail bellwether Walmart posted better than expected earnings, but disappointing German data added to the sense of global economic gloom.

Contracts tracking Wall Street’s broad S&P 500 and the technology-heavy Nasdaq 100 slipped 0.1 per cent lower ahead of the New York opening bell, trimming earlier losses.

Europe’s regional Stoxx 600 share index added 0.3 per cent. Germany’s Dax rose 0.5 per cent, while London’s FTSE 100 rose 0.6 per cent.

Those moves came after the world’s largest bricks-and-mortar retailer Walmart reported stronger than feared quarterly figures and raised its full-year guidance. The company — widely perceived as a barometer for the health of the US consumer — had in late July issued its second profit warning in 10 weeks.

Shares in Walmart added 3.8 per cent in pre-market trading after it forecast a smaller annual loss than previously indicated. The shares had in May endured their biggest one-day drop since 1987 when Walmart cut guidance for the first time.

Earlier on Tuesday, fresh survey results had cast a pall over the outlook for Germany. Figures from economic research group Zew showed that investment professionals’ confidence in the eurozone’s largest economy had deteriorated again in August. A reading of minus 55.3 for August was worse than the previous month’s figure and a consensus forecast of minus 53.8.

Separate data on Tuesday showed that the EU recorded a trade deficit of €24.6bn in June, €4.6bn more than the expected €20bn but below the €26.3bn recorded in May.

Central banks have in recent months indicated that monetary policy tightening strategies will be guided in part by signals given by economic data releases.

This has made market watchers pay more attention to individual data points than they have previously, said Altaf Kassam, Emea head of investment strategy and research at State Street Global Advisors.

“It’s going to increase volatility and the worry is that will be magnified by lower liquidity in the summer,” he said. “Every data point is going to be scrutinised, which can lead to greater day-to-day volatility.”

In Asian equity markets, Hong Kong’s Hang Seng index closed down 1.1 per cent, pulled lower by a drop in the shares of food delivery group Meituan after Reuters reported that tech group Tencent planned to sell all or a bulk of its 17 per cent stake in the business.

That decline came despite a sharp rise in the shares of Chinese property companies, on reports that Beijing may order state-run groups to guarantee some developer bonds issued in the country’s onshore market.

A day earlier, Chinese shares had edged lower after economic data for the country showed retail sales and industrial output rose at a slower pace than economists had expected, further complicating the global growth outlook. China’s central bank on Monday cut its medium-term lending rate by 0.1 percentage points to 2.75 per cent.

In commodities, Brent crude added 0.5 per cent to trade at $95.65 a barrel. A day earlier, the international oil benchmark had slipped more than 5 per cent to as low as $92.78 in the latest sign of recession fears stalking markets. US marker West Texas Intermediate was up 0.8 per cent on Tuesday at $88.89 a barrel, after on Monday sliding to its weakest level since early February — before Russia’s invasion of Ukraine.

US government bonds were broadly steady on Tuesday, with the yield on the benchmark 10-year Treasury note broadly flat at 2.8 per cent.

The dollar added 0.3 per cent against a basket of six other currencies.


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