This Week in the Markets – Footlocker, Interest Rates, Morgan Stanley, Buffett

Stocks close lower, but posted a positive week.

The Dow Jones Industrial Average dropped 109.28 points, or 0.33%, to 33,426.63. The S&P 500 traded 0.14% lower to 4,191.98. The Nasdaq Composite slid 0.24% to 12,657.90.

All three major averages capped the week with gains. The S&P 500 rose 1.65% in its biggest one-week advance since March. Meanwhile, the Nasdaq Composite gained 3.04% for the week, also its best weekly performance since March. The Dow added 0.38%.

Fed Chair says rates may not rise as much as expected

Jerome Powell, the chairman of the Federal Reserve, stated on Friday that the pressures felt in the banking industry may prevent interest rates from rising as much as initially anticipated.

“The financial stability instruments contributed to the stabilisation of the banking industry. In contrast, developments there are resulting in tighter lending conditions and are anticipated to have an impact on inflation, hiring, and economic growth, he said as part of a panel discussion on monetary policy.

In order to accomplish our aims, our policy rate might not need to increase as much as it would have otherwise, he continued. Of course, it’s really questionable how much.

Gorman steps down as Morgan Stanley CEO

James Gorman is stepping down as chief executive at Morgan Stanley (MS:NYSE) bringing an end to a 13-year run in which he overhauled the Wall Street bank. Gorman said at an annual shareholders meeting Friday that he expects a new CEO to be chosen within the next 12 months. The outgoing CEO stated that the board has identified three strong senior candidates to be the next chief. Gorman said he would become executive chairman for a period after the new CEO takes over.

Buffett buys more Occidental shares

On Thursday, Berkshire Hathaway Inc (BRKa:NYSE) announced that it has increased its holdings in Occidental Petroleum Corp (OXY:NYSE), bringing its interest to 24.4%.

The company run by billionaire Warren Buffett claimed in a regulatory filing to have paid around $201 million for 3.46 million Occidental shares between May 16 and May 18.

for each of the previous six trading days, Berkshire purchased Occidental shares, spending nearly $327 million for 5.62 million shares.

Walmart beats earnings expectations

Retail giant Walmart (WMT:NYSE) posted stronger-than-expected profit and revenue and raised its full-year profit outlook, as the company’s stores attract price-sensitive customers who have curtailed spending elsewhere. According to Walmart, it is still expanding its share of the food market, even with more affluent customers. Even yet, according to Chief Executive Doug McMillon, the business closely monitors inflation to project performance for the remainder of the year. Walmart stock climbed 1.3%. Thursday.

Foot Locker shares plummet 27%

Sneaker retailer Foot Locker (FL:NYSE) posted weaker-than-expected earnings and cut its guidance for the year after warning that sales have slowed in recent weeks. Sales have significantly decreased since March, when the firm last provided guidance and outlined the new executive’s strategy for the chain, according to Chief Executive Mary Dillon. In order to boost demand and get rid of inventory, the company, which is in the midst of a reset year, intends to adopt more drastic markdowns. Shares of Foot Locker fell 27% on Friday.

Micron Technology to invest $3.6bn in advanced chips

Chip manufacturing at Micron (MU:NASDAQ) is accelerating. With assistance from the Japanese government, the American semiconductor company announced it would invest about $3.6 billion in the production of sophisticated memory chips in Japan. The agreement, which was made public on Thursday in Japan ahead of the G-7 conference, comes as tensions over chip technology between the United States and China are on the rise. Micron stated that it would begin producing cutting-edge memory chips in 2025 as a result of the investment. Prior to the pandemic, there was a global scarcity of semiconductors, which increased countries’ desire to support domestic chip manufacture. Shares of Micron rose 4.1% on Thursday.