the walmart u.s. ceo said that there were about 20% of inventory that he thought he wished could just go away. is not like they didn't know that they had excess inventory and you can guess what kind of inventory they had too much of and now it just looks like they are really quantifying the impact it is having on the quarter. >> thank you for the color. courtney reagan with us. i don't know. do think that target stands a chance in terms of escaping this in better fashion? >> it is hard to see how they escape completely. i'm wondering if target feels like they are going to miss also, does this give them any cover to pre-announce? they don't have to pronounce even if they're going to miss, they do not have to pronounce. it makes me wonder, it is the mix issue that is so important for target. it really does not look poorly. the one thing that target has a meaningful advantage over to walmart is that they are a u.s. and canada centric company so to the extent that the dollar is strong, that is a benefit f

i expect the chiefs to do better, and these are all walmart, and i expected walmart to be a division team. a top division team, and they are not delivering and they may call me and say, that everybody is not delivering. i don't care about everybody. this is walmart, and they have the best intel and more information and why didn't they pivot? >> this is the bull whip of the day -- >> and release at the end of the day, hey, you know, katy bar the door. i mean, i want to know what kind of intelligence they are going to have to fix this problem. >> well, they did say constructive things about back to school, and we have all morning to talk about it of course. >> i wish they had not said that, because once again if they screw it up, and we are spending too much time on walmart, and listen to, this mr. mcmillan, i am not saying that everybody else is going to screw it up, too, but i am saying that you are the best and you need to be held to a higher standard, mr. mcmillan, and you need to be held to a higher standard, and he can come out to say, i don't need to be, because i am not that go

so it's exactly what we heard from walmart it's not just walmart and it looks really sad for the rest of the year. >> mark, you say it's old news, though why? >> we think it's backward looking. our survey work says the consumer is actually getting a little less bad. i'm not saying it's getting better but we actually show discretionary spending intentions remain positive importantly i think from a consumer standpoint because walmart consumers, those making less than $75,000 per year, we saw sequential improvements and that's the first time since the war in ukraine broke out and inflation got worse. we're not calling victory but we look at the result and say this is backward looking. obviously gas prices had a huge impact, especially when you think about the lower income consumer they're off of highs still relatively speaking, 15% off of highs. and i think too that walmart, back to the previous comment, probably had no choice but to do this because target basically said in early june that they're going to start marking down a whole bunch of that inventory to force walmart's hand so both

do you think this could be a walmart problem? is walmart more than likely in the consumer,? never a walmart problem. walmart, is the consumer. this is the lower income consumer. they are spending more on food. it's a lower margin. walmart, raised their guidance because of inflation. they lowered their earnings. they are going to be down in the high single digits. this is a flat earnings growth. walmart is actually in a recession across the board. target has a slightly higher incomes. they told us that weeks ago. bath and body works, told us last week that they are seeing the consumer come in. it's absolutely across the board. you are stealing more money from the wallet to put food in the refrigerator, something else has to go. that's exactly what we are seeing from bodycare to consumer electronics. >> i was in walmart yesterday. it has a grocery store in it. a lot of people there. i should have taken a closer look at the carts to figure out where they may be going. here's what i worry about. consumer products. my wife works in consumer products. we talk about this for the di

>> bill simon got me fired up by target and walmart i'm going to go with walmart.ay not be as cheap but i think it was knocked down way too much. they are the beast in retail. >> steve grasso? >> i've been saying cell xle, the energy etf. i'm going to stick with that one and i do believe the only light at the end of the tunnel for energy is that when they report earnings, they are going to be the only ones that have wider margins than the rest of the air and space. but i'm still sticking with it, i think lower prices enter. >> another one bill simon mentioned, tjx should be the beneficiary of all this excess inventory. i'm long that. >> karen used the word encumbered. there's one song that uses the word encumbered, from the hollies, he ain't heavy, he's my brother. go google it right now. dhi in the face, tim seymour. >> so aggressive, no need for that. that does it for this hour of fast money. do not go anywhere. it's a 2 for tuesday. another hour on tap after this, a fast money special edition in two. okay... yeah... oh. don't worry i got it! become an agent of i

and this is exactly what walmart said.es and our sales are better, but it is low-margin business, and while they are buying the groceries and the gasoline, they cannot afford to buy the general merchandise, and walmart is the largest general merchandise seller in the country, and just like target they had to take the numbers down. i am surprised they had to take it down again, and i was surprised how tough it was for the bottom 40% of the consumers and that bottom part of the consuming group is saying is all i can buy from you right now is the groceries and the gas, and the apparel is sitting on the shelf. apparel is selling well to the top 60% of the consumers. macy's is doing well with apparel right now, and so is nordstrom's and dillard's and capri and tapestry, and they are doing well, and that customer is buying and going out to do the experiences, and they can still afford it, but the walmart customer, a lot of them right now, they still cannot afford it and concentrating on the food and gas, and as long as that is h

walmart down about 8%. shopify down about 16.t everything to do with inflation, and we're going to see how that affects other stocks with people spending so much on. do not tell that to the kardashians. instagram pushed out an update, testing features that makes it more similar to tiktok short-form videos, suggested posts to users are pushing back. kim kardashian and kylie jenner sharing a petition, make instagram instagram again, stop trying to be tiktok. i just want to see cute photos of my friends. guys, remember the time snapchat saw almost $1 billion off its market cap when jenner criticized the app's redesign. that was back in 2018. not hurting them much. they've got a lot of other things to worry about. >> we'll talk meta later on in the week meantime, close to session lows. let's get to the judge and the ha half >> welcome, everybody, to the halftime report. less than three hours until microsoft and alphabet report their earnings the stock hanging on every word. so, of course, is your money the investment committee debate

this is walmart. not some retailer. walmart is the yankees of retail. of course, every other retailer got punished today. i still bet costco will find like they did last time. costco is also great franchise and unlike walmart, they have been living up to their reputation. i used to cover sports for a living, when you get that kind of reporting, you get a unique perspective of franchises like walmart. two miserable seasons and you would be if you did not qualify. it is ridiculous. walmart has got it wrong. and then they got it wrong again, the coach messed up. i'm not coming for the coach's had. that said, this is a, what have you done for me lately, bit. with walmart, the answer is, >>> water everywhere. up to a third of grain. >> this came up very quickly. the forecast for st. louis. a warning from the international monetary fund. a global recession's what new earning reports from the company tell us.

we will start with the industry leader walmart. as she mentioned, it is down seven, nearly 8% right now, trading slightly above where it was at the start of the pandemic. courtney reagan starts us off with the news on walmart. courtney? >> reporter: hi, ty, it has been 8 1/2 years since walmart has issued any kind of warning. sales are higher but profit is lower. ceo doug mcmillan says that the increasing prices of food and fuel are affecting how customers spend, particularly on general merchandise and apparel. so walmart is cutting prices further to incentivize shoppers to buy more discretionary merchandise. however, the retailer is increasing its total sales expectation, because it is selling more grocery items, which in turn are less profitable. about 55% of walmart sales come from groceries. food is only about 1/5 of targets revenue by contrast. goldman sachs, wells fargo, bmo, and oppenheimer are the analysts that are not worried about walmart as a long-term investment. as a warning, they are lowering those 12 month price targ

now look at walmart a huge selloff this is important because walmarts results reflect consumer activity as the economy slows and inflation bites, walmart said people are shying away from clothing and electronics so they could spend their money on more expensive food the stock is down, up eight half% that is taken 80 points of the dow industrials and reducing walmart value $20 billion, as we said walmarts results taken 80 points off the dow which will open up a loss of 120-point that is not so bad when you consider walmart in it. the s&p 500 on 17 nasdaq down 73, a little red ink on the left-hand side. look at interest-rate all the way down on the ten year treasury you are back to 2.73% that yield is below the yield on the two-year and the recession indicator still there. the economic headline this morning is recession the president doesn't think we are in one or going into what they're trying to redefine a session because they don't want to be tagged with the biden recession label. my opinion the first six months the economy contracted that may or may not meet the data enter definition

walmart reaches for the scissors once again. tom: walmart is front and center but it is an amazingly convoluted morning with all sorts of stuff going on. you will get to lufthansa in europe coming up but what you see with walmart is not so much econo babble but actual consumer action. consumers saying i have to buy this, not that. jonathan: we have an execution problem in the mix as well. tom: gm out and we will talk to the cfo and you wonder what the execution mix at gm is as well. who cares about the recession. corporations are adapting and adjusting. jonathan: stockmarkets adjusting as well and bramo, we talk about these issues again and again and people come out and say they are well priced and target and walmart prove us. those people are wrong because it is not well priced at all. lisa: that is going to become a theme, trying to parse out the distinction in this nebulous world. how much do we see walmart representing what we will see in other retailers? certainly stocks seem to be reflecting a broader based fear of pain bu

walmart and shopify, two of the stocks you have to pay attention to today walmart after it cut its profitorecast because of the effects of inflation hitting consumers and their waltz, shopify, kelly mentioned the online shopping trends may not be as robust as they thought, laying off people. walmart down 8% and shopify down 15%, kelly a very interesting dynamic for the fed to navigate in this kind of environment with a possibly weakening consumer and maybe inflation on the way down, i don't know we'll send things back over. >> i think of them all gathering kick off the two-day policy meeting and these are the headlines. more on walmart in just a moment, but inflation and recession fears are front and center, and the latest cnbc fed survey as well let's get straight to steve liesman with all the results steve? >> reporter: kelly, with increasing conviction, the respondents to the cnbc fed survey are predicting a recession on the way and link that cause directly to the fed's efforts to raise interest rates and bring down inflation the average probability recession in the next 12 months surg

walmart is going to crush everything. i like to buy the good, not the bad. >> my question is on kss with the franchise group now off the table at $60. thank you for the good advice i'm not buying. a dividend, is this a goodbye? >> if it opens down below 24 tomorrow, then yes, i could see buying little. i think you might be okay. but 24, that's it. it's a brutal week with far too many earnings reports. this is the most important one, falling in recent weeks because of concerns of amazon. i'm going straight to the source to see if we can put these worries to rest after falling about 50%. is it time to take a second look? i'm getting the latest. it's been one week in our new home. i'm sitting down to get her take on everything from market volatility. stay with kramer! bubbles bubbles so many bubbles! as an expedia member you earn points on your travels, and that's on top of your airline miles. so you can go and see... or taste or do absolutely nothing with all those bubbles. without ever wondering if you're getting the most

shery: i warning from walmart, the -- a warning from walmart, citing the need to lower prices to lowerentory. a big drop in the credit rating. >> dropping almost 10%, the shock to the market, this is a harsh reality check of how consumers are cutting back on spending even for necessities as prices soar. walmart says adjusted earnings are going to fall as much as 30% in the current fiscal year. two months ago the company said it would only dip 1%. that is your shock. here is a quote from the ceo, the increasing level of viewed -- food and fuel inflation is influencing how customers spend. they are cutting profit outlook for the quarter and into the fiscal year. they are expecting a headwind in the second half based on currency rates. the guidance cuts are emerging as the result of building up inventories after yields -- years of supply chain constraints and booming demand. now that life is returning to normal although covid is still with us, a lot of retailers are increasingly stocked with supplies that are unwanted merchandise in this time of predictable consumer demand. heidi: a rival

walmart would mr.umbers especially given what happened with target, a continuation of the consumer moving from goods to services and certainly walmarts low brand consumer is having a difficult time with the food cost and energy cost. maria: what do you think this is telling us about the rest of the year walmart not just cutting its quarterly guidance but also the rest of the year and were waiting on the gdp data how are you expecting this to play out. >> for walmart they are cutting the entire year they are clearing out inventory and cutting prices, positive for inflation that prices will come down and many of their goods for the whole year we are going through a significant slowdown, there is no doubt the gdp numbers will show likely a negative number depending on whether you were to call it a recession or not we talked about that in the last segment. were going through significant slowdown so earnings are going to be impacted by that we are seeing the reduced numbers, prices can be done very quickly

the high inflation than they had expected at walmart. and so, they are also having to move more aggressively than they had hoped and thus cut prices deeper than they had hoped. thus cut into margins. emily: walmart's ceo says the increasing levels of food and fuel inflation are affecting how customers spend. we are seeing more pressure on general merchandise in the back half. this will not assuage fears about recession. will this potentially have a big impact on markets across the board? john: i think people will be concerned by this. again, walmart had been out there speaking pretty brashly about how it was going to be able to handle this situation without taking any drastic steps. but what they are seeing is the shift in consumer behavior, which is part of what led to the inventory buildup in the first place, as people started going out more and shifting away from the spending on house and home that they had been doing in the past. now a further shift is happening as people realize food prices and fuel prices are really hurting them. a

walmart. jonathan: walmart is down, clearly a shift we have identified for the last couple of quarters. clearly experiencing higher inflation and the spend that is going on now, food and gas. where the food -- spent is not going either discretionary items we all wanted in lockdown. they got as much of the stuff as they could, and then they built to much of it. that is the difficulty we are having. it is a problem with the consumer. tom: leaving the middle-class flat on their back and it is a republican presidential debate as well. lisa: trying to basically bring out what it means to have a technical recession versus a real recession while we are not in a recession or we are seeing from companies right now are the blanket prices. mcdonald's, coca-cola, and those that are actually cutting prices which is walmart, amazon, some of the other companies. how much is this a trend and how much is this a specific company by company story of execution and management as they deal with different types of c

it's a profit machine compared to more walmart. -- walmart.onathan: they have a profit mix around consumers and the pandemic where the cycle is moving fast. i would throw in there. it's in the same. facing the same challenge. in the middle of august, i wonder if walmart has come out in the middle of august lisa:. how many times -- august. lisa: how do we get a sense of this is an idiosyncratic execution issue versus a broader based difficulty engaging consumer is being squeezed in a significant way? jonathan: i think it is very difficult and if the c-suite cannot forecast it, how do we expect the federal reserve to forecast where the economy is going. difficult. the future is down 4%. five tends to six tense of 1%. the euro is weaker. -- five tents to 6 -- 5/10 to 6/10 of 1%. 6/10 of 1%. the euro is what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smar

it is walmart.omberg. ♪ anna: it is tuesday, the countdown to the close starts now. ♪ >> the countdown is on in europe. this is "bloomberg markets: european close" with guy johnson and alix steel. ♪ anna: welcome back to bloomberg markets: european close.

walmart cuts its profit outlook. shopify now cutting jobs as well.hat does the future hold for e-commerce and a potential recession? we will talk about all of that and more next, this is bloomberg. ♪ >> can walmart surprise posco to its profit spell doom for e-commerce? this is all due to the rising cost of food and gas. john edwards joined is not to talk about the state of the e-commerce industry and on top of these numbers from walmart, we see shopify cutting 10,000 jobs. this is that has been riding high over the past couple of years. >> shopify made a big bet that the big shift to e-commerce that we saw during the height of the pandemic is going to be long-lasting and in fact it accelerates faster than anybody had expected before covid. that bet turned out to be completely wrong. they thought people were not going to go back to in person shopping at the pace that they did but people have flocked back to stores and so that led to shopify having to cut a bunch of jobs. >> what does this indicate about amazon results we are expecting later this week

that is where walmart's profit warning came from.y raised their expectations for revenue overall but the mix is going to be much left -- must left -- much less profitable revenue for them. amazon obviously likes to sell a lot of those same big ticket items that people are starting to shy away from. emily: we were speaking about this with respect to alphabet and microsoft earnings earlier. we are seeing mixed results, slightly below estimates. it is causing some confusion about whether or not we are already in a recession. our week according to the numbers that we are seeing from these e-commerce companies? >> it's hard to say, but i would say no for now. again, it is less of a complete slowdown in spending and more of a shift in the mix. high inflation is biting everyone. it is changing the priorities that people have an terms of what they are spending on. as we saw in the earnings from companies like mcdonald's, coca-cola, pepsi a couple of weeks ago, people are still spending on things like food, going out, buying soda and chips an

i'll show you what is going on at this hour the lows of the day, that walmart wallop is having an impact today there's the dow down more than 200. the s&p is down about 50 points. there's the nasdaq going into these reports after the bell a near # 2% loss. josh brown, let's quick it with alphabet, which you own. ad spending slowdown tiktok competition to youtube. got to watch that. what are you watching most >> alphabet is down 7.5%, just since snap had its disastrous report so the market is very quickly pricing in just this idea that things are tougher than they've been, overall in ad spend. and the thing about alphabet and meta and i said this yesterday, is that they have now gotten so big that there is no longer a secular growth story that works without a cyclical growth story for really the global advertising business it's just too much of the market for them to skate while everyone else feels the pressure. i think that's been reflected in the multiples for these stocks i don't think they have been priced the way that growth stocks historically have been priced i think they're now se

shares of walmart fell 10% yesterday. the company's former ceo says walmart's move to lower its profit outlook midquarter is rare. >> i know we did it once when i was there, and i've been gone for a long time, so, you know, an interperiod warning like that is very uncommon for walmart. >> the federal reserve is set to raise the cost of borrowing again tomorrow in an attempt to slow the economy down to fight inflation. the fed is expected to increase interest rates 0.75 point similar to last month and the commerce department will release a report which could show the economy shrinking for a second consecutive quarter generally understood to be a recession. >> the rule of thumb, two straight quarters of negative growth equals a recession, but the white house doesn't want to use the "r" word, officials pointing to the jobs market which remains historically strong and the president saying god willing, i dent think we'll see a recession. >> reporter: one bright side is dropping gas prices now at an average of $4.35 a gallon, 5

shery: walmart is cutting the future forecast. china is angry about the nancy pelosi taiwan visit between -- after they call between president xi jinping and president biden. a warning for the eu ahead of colder weather. heidi: we are seeing fed quarter gdp expanding .7% against the estimate of .4%. two point 9% headline number for the second-quarter gdp. we are also seeing that as a bit of an acceleration from the previous quarter. a quarterly basis and the gdp year-over-year almost matching the previous quarter's 2% pace. we continue to see the won seeing some weakness as questions remain over the resilience. some signs of strain going through two major economies in asia including south korea at it comes to decreasing demand for goods. the chinese economy, we are watching the won in terms of the reaction when it comes forward. shery: we have so much weakness around the korean won. annabelle: really it does point to the pressure on the bok. the global growth fears we have seen in the economy, the. we are having in asia because we

walmart does not have aws. jonathan: that is true.ot some investment advice from a terminal subscriber, go to cash. who do you think that is? lisa: good morning, tom. jonathan: go back to bed. from new york, this is bloomberg. ♪ >> keeping you up-to-date with news from around the world. nancy pelosi is set to leave on a trip to asia today. the question is if she still plans to stop in taiwan. reports that she plans a visitor there has drawn criticism from china who considers taiwan to be part of its territory. taiwan was one of the central issues discussed between joe biden and xi jinping, biden warned against limitary -- against military action to realign taiwan with the mainland. the government is considering seizing undeveloped land from listed companies and using it to finance the completion of housing project's. developers have failed to finish building homes. french president amanda macron has called on -- to help your move away from russian oil and gas. he stressed the importance of continuing the coordination with saudi arabia

the fact that walmart is discounting is good news. prices have come down a little bit, that's also good news. but i don't think the coast is clear yet on inflation. until that coast is clear, there's a lot of volatility in markets and going to be a lot of unhappy consumers. the paychecks we bring home are not going far enough to cover the rising expenses. so yeah, you can go back and forth on recession. the real issue right now remains inflation. >> trace: help me out there, connell. when somebody says walmart is dropping prices, that's good news. aren't they dropping priceses because they have to? >> yeah. we need them to. the chairman of the federal reserve talked about that. it sounds counter intuitive for people to say we need the economy to slow down. that's the fed's argument that we need the economy to slow down. they don't want to slow it too much. maybe they already have. again, the semitic argument of the recession or not becomes somewhat irrelevant. if we're not, there's a chance we could have a mild recession or a soft lan

accessible to mainland investors and as giving tech shares the boost, there is caution elsewhere as well walmart earnings painting a looming picture of u.s. consumers ahead of the looming rate hike this week. russia jolting gas markets reducing gas flows. david: by the way, while we are talking about that there is an eu emergency meeting on energy taking place later today. mark your calendar it is a big thing to watch as far as the day is concerned. that we move into the fed and allow the big earnings, equity markets as you can see is mixed, slight lift, past tense almost, they have come off the highs of the day dollar index at a three-week low right now. putting everything together, tables are up 31%, commodity mark -- a third of 1%. we do not see on the screen is the overall caution in the market, volumes, it is summer as well and then you have the data coming up, not so much what they do -- the fed is coming up, not so much as what they do, but the guidance. asia is up half of 1%, let's change it up, 15th and 16th almost split in between. we talked about recession lows and that one as well he

walmart has made this bet, but walmart also has an agreement through gm and ford and no one is makingese at any volume. emily: isn't that the biggest challenge? how are they going to make 4500 of these? ed: rivian is the poster child because they have this order for 100,000 units were amazon. my sources told me they have built 600,000 -- they have built 600 so far. the pace has been disrupted by supply-chain problems. there is competition. it is an interesting market because we are obsessed with the consumer ev but we forget that in the road of moving things from a to b, these commercial giants need other stuff, vans and trucks. emily: it is not a zero-sum game but we will be watching. thank you. enjoy the weekend. that does it for this edition of "bloomberg technology." we have great shows next week, we will be across earnings all week long, we will be following that hearing in delaware, twitter v. musk, and matthew ball will be joining us to talk about all things metaverse and more. have a wonderful weekend. this is bloomberg. ♪ this is xfinity rewards. our way of showing our apprec

half of those have $10,000 or more and walmart quite a different story where already walmart is indicating income scale are most harmed by higher inflation and the walmart results are in education, walmart cut its earnings forecast because people are spending more income on household goods like food than other appliances. that tells them that low income people in particular are worried about their economic futures. neil: i am wondering too what the federal reserve thinks when it hears news like this or if it factors in to their decision, that is a slow down sign. >> the irony, the purpose is to slow the economy and that could cost americans jobs and the people who are most impacted or lower income people. that is troubling. that's why we need to take some lessons from the reagan years and remember when the fed raised interest rates in the 1980s it was bolstered by the fact that reagan cut income taxes and helped the supply-side of the economy and is buffered people from the effects of high interest rates. we need to start cutting taxes to help the supply-side of the economy so we don't hav

>> you listen to the walmart call and you listen to what they said, it is a problem. it is to walmart and to everybody. they can sort of -- they can take their foot off the gas. they can say the reality is the data suggests they are a couple of years behind the curve in the have to go full speed ahead. if the markets show up on the back, that is the environment we find ourselves in. i don't see how they can say anything but inflation is still the problem we are facing. we will do everything we can to quell it. that requires us to continue to be fierce in our objective. i think by the end of the day you don't fight the fed when adding liquidity. don't fight it when taking it away. >> there is a notion that exist that they could be a pivot in the fed's approach. mr. lockhart seems to that is not in the cards anytime soon. you are actually pointing that out on a conference call. >> yeah, i think they are pressing and the fed will be softer in their term. they are going to go 75. i don't think the market likes what he just said, even though i think he is right. >> to got

what's amazing is before the earnings, we were worried about what walmart was suggesting and asked by. then, amazon shows its power and prowess. >> and relief. that's exactly right. there were these expectations then the results blew the concerns away. investors were very relieved that amazon had resumed growth up to 17% in the current quarter and also they shed about hundred thousand workers and they got their spending under control. there were concerns about overbuilding and having too many people. investors were worried how long that was going to last and drag on. this quarter, they showed they are starting to unwind that and starting to see more positive signs. >> anymore details from the call yesterday? they spelled out how they were going to manage the next quarter. >> one thing on the spending was investors are always worried about how quickly they're going to spend whatever comes in. because of that overbuild on their delivery network, they're going to cool off on warehouses and delivery stations, but they will spend more and it's going to be targeted on data centers and feeli

coming up, consumer sentiment coming in above sentiment but walmart and best buy painting a different picture with the earnings this week we'll ask the ceo of columbia sportswear what is happening with the consumer. from the chips act to its manchin deal, we'll talk to libby cantrell about the big washington events that could impact your investments. we're closing out a strong month for the averages, the nasdaq up double-digit on track for the best month since 020 amazon and apple are driving today's pop after reporting positive results so does the tech trade have more legs time to get back into growth let's bring in morgan blat and tim resco. first to you on the results. because you have a hold on amazon and apple and aren't quite as enthusiastic as some of the other analysts on the street today. what -- what is wrong with the amazon report which is being universally embraced up 12% and seems like a real standout >> well, i certainly thing there is relief in amazon. i think there was concern going into the report. but if you look closely at what was happening, there is some things th

that is not good for walmart investors but i think that it shows that walmart shoppers are adapting,of reality, right? >> well, totally. and you've already seen you have spending still at the more cost conscience end of thing. so not surprised that walmart will cut their prices. people will keep shopping there. people will keep shopping attractiat tiffanys. it is the middle that you have to worry about. i'm sure that we'll still fill our grocery carts, maybe not use as many brand names as we might have, but will we buy that fancy new phone or a great couch for the house, i'm not so sure. so it is those companies in the middle i think that are going to get squeezed. that is always the case when there is hard times. >> yeah, watching walmart, a great way to look at the typical shopper, the paycheck to paycheck consumer. and you can see they are making changes and i think that that is important to watch. and we'll hear from a lot of other companies this week, so we'll see if other retailers have the same issue. we heard from larry summers over the weekend and again last night on don lem

stuff that was at walmart.e get early look at what they have it is target and walmart. >> it is. >> providing a lot of the inventory for ollies. >> they have things like -- you know yeti? they will have yefi and made oddly in china. >> kidding >> no. feti made in china. mostly third tier cities. >> we haven't talked a lot of china this week. >> they already had. >> fbi mi-5 warning about industrial - >> going on for 15 years but -- >> i know. by the way, we stopped them by putting pressure on the dutch. >> yes. >> pressure on the dutch that hasn't happened since 1565. >> ibm, jim? nice little kiss from morgan stanley today. up 4% for the year. >> i wept to paige mandy when's my coordinator with katie to see whether katie -- still on apple. >> eric is - >> eric did that ibm piece he likes -- it is the stock to buy in the late cycle. very powerful piece. i have to tell you when i look at what he's saying, it is an inexpensive stock and i think it's a good job. >> i mean, it is up this year. ibm is up. >> bought r

that is not the dynamic of walmart earnings. what is walmart doing right?ichael: mcdonald's is doing a few things right. really the sales were driven by price increases. they had not seen an increase in foot traffic at all. what they are doing better than others is they have scale. they can offer a value menu and price points their smaller competitors cannot match. jon: the other thing -- we were talking about shopify, a business exploding during the pandemic. in the case of businesses like mcdonald's, they retooled during the pandemic. thinking about how many menu offerings they had. it appears that allowed them in terms of having a tighter, more focused list of offerings to keep serving and keep focused to avoid some of those labor headache we've heard so much about. what would you say about what they have been doing over the last couple of years to get them to this moment to mark -- this moment? michael: a big thing was eliminating all day breakfast. it was hurting their operations. that was -- even though it had really spurred their turnaround six years

something that walmart and target don't have? tom: absolutely.f you look at amazon and go back to the third-party unit sales, their relative profitability is clearly the highest and cloud computing and strong in advertising. and much higher on third-party retail sales. so we compare them versus walmart or target, cloud computing helps a large percentage of their sales from third parties rather than through amazon. emily: let's talk about some of the challenges amazon has had coming out a couple of years of pandemic spending. they grew too fast, built out warehouse capacity to quickly. they haven't been able to fill that space. how much of a headwind will that continue to be? tom: it is a headwind but the data suggests they had 100,000 less employees between the march order and the june quarter. amazon is more noble adjusting had -- nimble adjusting headcounts when it came to their fulfillment centers. if you look through the lens of shopify, they felt overstaffed and their current e-commerce demand had a 10% reduction of force. i think those are

walmart shares up a percent right now. >> i did, frank. obviously, you know, we saw the news earlier this week, they preannounced and cut the guide for fy '23 i think they're obviously a procurement expert there's been a shift in consumer behavior i think that the lower-end consumer is feeling some pain, so i would say that for walmart, it was time for us to move out still trading at 22 times forward, which is a premium to the market at this point so we decided to take that capitol and move it elsewhere. >> after seeing what we saw from amazon, were you still feeling doubtful about walmart they have generally similar businesses obviously, amazon, fully ecommerce. >> yeah, i think amazon's a better play here they're continuing to take market share from walmart. i think their ecommerce business is obviously further developed and stronger so amazon will be the play for us here. and i think walmart will start to pull back a little bit. and they'll figure it back out, but i think it's going to take a quarter or two for them to figure this out.

economy to enter a recession, but what do new numbers from walmart tell us what is really going to happen>>> and as china gets ready to speak with xi jinping, is china gearing up against taiwan. and for the first time since leaving office does his vision resonate with voters. >>> and new cnn reporting this morning and new revelations that a trooper was on the scene of the uvalde school shooting earlier than previously thought. what the body cam video shows. >>> and did the u.s. wait too long to contain the monkeypox outbreak. dr. fauci is joining us. and will john berman and i be at work tomorrow as the mega millions reaches 900 million. i'll be here. >> i'm not buying a ticket. we start with marc short telling cnn that he testified in front of a grand jury. >> i can confirm that i received a subpoena from the federal grand jury, and i complied with that subpoena, but under advice of counsel, i can't say more than that. i'm not going to comment on others, to the team, regarding subpoenas, and what they testified to. >> joining us now, cnn chief legal analyst jeffrey toobin and cnn legal a

listen to walmart it tells you all you need to know. inflation is forced and foremost is karen set it going down. that to me is collateral damage at that point they accept that. they are thrilled the market is going high over the last month i don't think it's going to last very long. >> there was something interesting he said during this news conference that struck me and that is the notion in the second half the economy should be okay effectively because there is so much money on people's balance sheets and job openings. we are working against that in some way. it makes the inflation so much harder in terms of trying to put grit in the wheels of the economy to slow things down. >> i was a little bit confused by that though i agree. i didn't know what to make of that. i don't know if the number of job openings ends up changing because we see a lot of layoffs. or if more people come into the labor force, i don't know. i was confused by that. i think they still have inflation but i also think inflation is coming down. but there is still a

it could be delivering your online order from walmart next year.uperstore giant signed a deal with e vehicle maker canoe to purchase 4,500. walmart says advanced deliveries will begin in the coming weeks in the dallas-fort worth area. >>> that is your cbs "money watch" report for this thursday morning. i'm matt pieper, cbs news, new york. >>> well, there was a historic tribute at the u.s. capitol as a statue of civil rights leader mary mccloud bethune was unveiled. the trail blazing florida native with a statue in the national statuary hall in more than 150 years. >> the impact of dr. bethune is known to us.prod woman who ederself uan others. >> dr. bethune was determined to create opportunities for every child, every child, regardless of the color of their skin. >> bethune's statue replaces a sculpture of a confederate general. >>> up next, a fish out of water. a black bear takes a dip in a back yard coy pond. we'll show you why he does not stay longer. stay longer. why hide your skin if dupixent has your moderate-to-severe eczema, or atopic derma

michael: sherry said the problem is not just limited to the walmart location there. measures confirms that our arms revealed in thors scanned 1,04 packages at walmart and found 124 overcharges totaling $502. that's a 7% error rate. walmart told us it is testing an improved hand app capability to cut down on errors. "with more than 25,000 items available in our stores, we understand our commitment requires continuous observation and eno vacation. violations of finals can go up to $1,000. >> the finals are not designed to be punitive but to wake up the business. michael: more serious violations may be sent to the district attorney's office. >> if a company has done this many times over years, we would seek to lit gate. >> five companies in the bay area reached a $35 million settlement with target, accusing the retailer of charging more than the posted price. 2,217 items at target had uncovered 2767 overcharges. totaling $292. target says we've taken steps to improve our processes because the majority of the problems in california occurred when the price violations came

would this be a great deal for walmart to compete with amazon?on't generally see this kind of action with the stock that has been down so much. i am all for it. >> we make the assumption that it is hostile. it may not be at all. then board seats with twitter right away. a couple years back, they were aggressive on ebay. they'd been in the space, then mixed success. it's not that big of a company at $9 billion right now for like walmart, that is nothing. that is like one days inventory. student evaluation is not unreasonable. you can make the case that 21 times next year it's there. you make your for cash. it's cheaper there. you talk about a company with 450 million active users. that is not insignificant. their numbers were not disastrous. that a big run right here, that 18% of the app market. it will grind higher in earnings. >> we have a lot more "fast money" to come. >>> the italian impact, the country's prime minister is calling it quits. what does that mean for the euro and the dollar at home? >>> the lead in the bulk, analysts throw cosco

uncommon for walmart. all of this days before the commerce department is set to release a mit is anticipatedw america's economy shrinking for its second consecutive quarter. generally that is understood to be a recession. president biden and the white house are downplaying some of the fears. the president is saying he hopes we don't end up in recession. one positive sign is the gas prices. the average price and a california is down to $5.70 a gallon. that is from $6.72 a month ago. reggie: a san francisco couple isn't scratching their heads over a strange parking problem. they were issued a five foot parking in a space that was painted red while they were parked in that space. desiree and jeff say they have been parking in this spot on walken and union streets for the past 25 years. recently, they got hit with a $108 fine for parking in a red zone. >> the red stripe is that there were it wasn't before and they had the nerve to go around my tire. >> i had painter friends, and say what a bad job that was. th

a lot of this has to do with the walmart store you heard overnight.ve retail stocks diving, especially heavyweights like walmart, it will take the benchmark with. it comes down to consumer confidence. the momentum calmly optimism going into earnings dissipated with the nasdaq leading the way lower. it's down 1.9%. natural gas futures are higher. a lot of that is on the expected heat wave and what that could do to futures. you do see some things that are crucial. alphabet, microsoft are reporting. they are dropping as well. amazon has the lion share of cloud revenue. we are really talking about how much reparation there is on the business side. that's talk about the big heavy hitter, that is walmart. it comes down to inventory. how'd you get a company that has everyday low prices and pass on the cost to get rid of that inventory. that's the question. anna: that's a feature of many of these reports we are seeing right now. thank you very much with details on what's happening. this is what we are watching out for, u.s. earnings, another debate between th

walmart says what happens with jobs there.ut a few minutes ago, the ceo mary bar ral said they're concerned about the economy and recession, they're going to do things like quell hiring. same with goldman sachs, quell hiring. the real impact, yesterday, it was super interesting because she doesn't want the fed to raise rates in the way they're likely going to she said it's going to take us into a recession that's worse for average folks and folks that get no paycheck when they lose jobs. does it really matter if we're in a recession if everyone feels like we're in a recession and companies are acting like it? >> and larry summers pointed out when he spoke to fareed zakaria over the weekend. he sedin inflation is pain, jobs are pain, but inflation is pain. at least the fed is picking its poison what would be more devastating and have more harm over a longer period of time. and certainly hoping to avoid, you know, a significant downturn, but as well, as larry summers pointed out it's looking way and way more likely. >> poppy, th

but walmart does expect more customers in stores. meanwhile, mcdonald's says customers have mostly shrugged off the higher menu prices and the revenue has gone up. what's going on there? >> both of those companies, walmart and mcdonald's are facing higher costs as is practically every company right now. the difference however is mcdonald's has been able to pass on some of the higher costs. walmart can't do that as much because their whole brand is centered around being a low-cost retailer. it's having to eat some of the costs and that's why it's warning about profit. but jake, one thing i should flag, we talked about this recently in terms of the retail sales data. wall mmart warning they're speng more of essentials like food and fuel and that's leaving less discretionary income. the reason that matters to a retailer like walmart is their profits are higher on categories like apparel. their profits are lower on essential categories like food and fuel. that's why we're seeing the profit warning. it's yet another data point, yet anothe

we are going to be looking at walmart, and the u.s.sion yesterday, cutting their guidance before the earnings. down 9.9% in post market trading. their having to cut prices, consumers turning more cool on the prospects, or their ability, cutting that guidance for the second time. medevac and coinbase by the sec. we have some big interviews coming up, at seven :00 u.k. time, followed by unilever ceo at 8:00. and doonesbury seo at 9:00 -- at 930:00. europe still faces a challenge in a cold winter given the shortages of gas from russia. will discuss that later. this is bloomberg. ♪ tom: welcome back. this is "bloomberg daybreak: europe." i'm tom mackenzie, in london. russia sharply reducing the flow of gas to germinate, reminding europe of the daunting challenge the continent basis to build up its energy by winter. the eu countries such a tussle over an emergency regulation that could force 15% cuts in gas consumption during the cold months. we bring in our editor in brussels. how significant is because problems announcement, and the volat

. >> the president doesn't think there will be a recession but walmart may disagree. quarterly and full year profit guidance yesterday saying inflation is causing shoppers to spend more on necessities such as food and less on items like clothing and electronics. the company adjusted the earnings per share to drop as much as 13%. joining us now, co-anchor of squawk box, andrew ross sorkin. thank you for being here. we're having mixed messages every day, banks or the white house, no one seems to agree or what a recession even means. >> well let's take the definition off the table and just say -- >> we did that yesterday. >> the news on walmart is not good but the news on walmart is indicative of what is happening in the economy. which is to say people are spending more on food and gas and travel and experiences, there is a bit of this yolo summer thing going on, and less on things like clothing and electronics and so many of the other kinds of items that walmart had been selling. now unfortunately, a lot of the retailers bought too much of that stuff. because they thoug