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Markets Prepare for FOMC Meeting, Walmart Revises Sales Forecast & Oil Drops Once Again Below $100

GBPUSD higher ahead of Fed meeting

GBPUSD was trading higher to start the week as markets began to prepare for the latest FOMC meeting.

Many expect the Fed, led by Chair Jerome Powell to hike rates by another 75 basis point, as inflation continues to rise at historic levels.

Despite rising consumer prices, Treasury Secretary Janet Yellen today stated that the United States was not yet in a recession.

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The former Fed Chair stated that, “This is not an economy that is in recession, but we’re in a period of transition in which growth is slowing and that’s necessary and appropriate”.

She added that, “I’m not saying that we will definitely avoid a recession, but I think there is a path that keeps the labour market strong and brings inflation down”.

Markets still expect strong action from the FOMC, despite today’s words from Yellen.

Cable hit a high of 1.2082 in today’s session.

Walmart shares drop after hours, as company revises sales forecast

Shares in Walmart were marginally lower during regular trading on Monday with the shares closing down just 0.14% as the market waited for the Company’s earnings and conference call.

After the earnings release shares dropped almost 10 percent as management lowered both quarterly and full-year profit targets.  The bleaker than expected forecast was attributed to rising inflation that is impacting the retailer.

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CEO Doug McMillon stated that, “The increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress clearing hard line categories, apparel in Walmart U.S. is requiring more markdown dollars”.

Currently in aftermarket trading shares in $WMT are down 9.72%.

The company now expects sales to grow about 6% for the remainder of the year.

Oil price once again fall below $100 

Oil prices were again trading in a lower range, with WTI below $100 per barrel in today’s session.

Fears over inflation, and weaker than expected earnings increased concerns of a recession, which could ultimately lead to slowing demand for energies.

This, in addition to Russia and Ukraine signing a deal to reopen the Black Sea ports, means that supply could be soon increasing, whilst demand slows.

Yesterday, it was reported that crude inventories were piling up by more than expected in recent weeks, with figures nearing 10 million barrels in the past two weeks.

At the close of trading in New York, WTI crude was trading at $96.45.

“You need to know very well when to move away, or give up the loss, and not allow the anxiety to trick you into trying again.”

–Warren Buffett.

Eliman Dambell

Senior Market Analyst