Renta 4 : Stock markets open lower again (Eurostoxx -0.3%, S&P flat), after negative closes in the US and Asia.
As for central banks, Norway’s central bank unanimously raised rates by +25 bps, in line with expectations, to 4%, and anticipated more hikes in September, arguing that inflation is still not under control. A monetary policy direction that contrasts with that of other countries where they have already started to lower rates, such as Brazil or China, or where they are expected to pause, as in the case of the United States. Right now, and after the Fed minutes, and with August’s manufacturing surveys (New York and Philadelphia Fed) pointing to a stabilisation of manufacturing, anticipating the end of the recession in the sector, the market is only discounting with a 30% probability of a rate hike in November and 10% for September.
It is worth noting that yesterday Target and Walmart released results, which are usually an indication of the health of US consumer spending. Target reported a ~-5% year-on-year decline in sales in 1H23, which led revenues to come in 2% below consensus expectations. Despite this, the expansion of margins has allowed it to reach an EPS of €1.8/share (vs. $1.47/share expected). Walmart, on the other hand, posted an EPS 9% above estimates and revenues that also exceeded forecasts by +1%. Both companies sent a common message about the lower consumption that is being seen as a consequence of the rise in interest rates and inflation. In fact, Target lowered its guidance for the year as a whole while Walmart upgraded it, an opposite direction that is explained by Target’s greater dependence on discretionary consumption.
In a session with few macroeconomic references related to prices. In Japan this morning, July CPI showed a rise in line with preliminary data, +3.3% year-on-year in the headline rate (vs. +3.3% estimated and previous) and +3.1% year-on-year in the core (vs. +3.3% previous). Also, during the session, the final CPI data for July will be published in the Euro zone (+5.5% year-on-year (+5.5% previously and +5.3% estimated) and core (+5.5% estimated and previously).
