The stock market fell sharply on Tuesday after six straight days of growth lead by Walmart, who reported lower than expected earnings, according to MarketWatch.
Walmart’s most recent quarterly earnings release admits to a 28 percent decrease in operating income, which they attribute almost entirely to bonuses and increased worker minimum wage, which the company recently announced in response to the signing of the tax overhaul in December.
“Excluding the impact of discrete charges detailed in this press release, operating income would have decreased less than 1.0 percent,” according to Walmart’s report. While many other corporations reported an initial loss that they intend to catch up from as they adjust to the impact of the tax overhaul, analysts are quick to point out that Walmart also had fewer than expected online sales during the holidays. “Walmart and other staples in general are really dragging us down,” JJ Kinahan, Chief Market Strategist at TD Ameritrade told Reuters, “The wound was a little self-inflicted in that they said they were going to draw down a little bit this quarter because they needed to do some technology.”
As decreased online shopping hurts brick-and-mortar stores, massive online retailer Amazon continues to report rising numbers. Other more technology dependent industries continue to show strength despite inconsistencies in other markets.
Stocks in general began to fall late last month after a long period of record growth following anticipation of market strength following the signing of the tax overhaul. While retailers, in general, reported higher-than-expected projections resulting from the new tax code, many large banks reported drastic losses. Further economic uncertainty in the face of looming government shutdowns throughout recent weeks didn’t help the situation.
As stock markets fell Tuesday morning, treasury yields – a measure of the return on investment on the country’s debt obligations – increased, potentially signaling increased faith in the national economy following the increased faith in individual markets that drove up stock markets in recent weeks, according to MarketWatch. This new faith is likely in part a sign of relief on the part of investors in the wake of the finalization of the national budget signed by President Donald Trump earlier this week.
The strength of the dollar compared to other major global currencies is also on the rise.
