Warnings from Walmart and Target could spell trouble for the economy and the stock market

Warnings from Walmart and Target could spell trouble for the economy and the stock market

  • Walmart, Target and other retailers are warning of changes in consumer spending and the economy.
  • The slowdown in consumer discretionary spending due to inflation, which could lead to fewer jobs and excess inventory.
  • US stock indices are already down double digits this year, but further declines could be in store if inflation remains high and the economy slows further.

Already-released earnings warnings from two retail stalwarts and others expected this week offer clues as to whether a recession is looming, how quickly it could come and what this could mean for the rest of the year, analysts say.

Walmart and Target, back-to-back last week, reported lower-than-expected earnings amid a surprisingly rapid turnaround in consumer spending and higher costs, including transportation and overstaffing.

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