Anti-trust chief to lead Philippines’ economic planning agency

MANILA, May 23 (Reuters) – The Philippines’ anti-trust agency chief Arsenio Balisacan said on Monday he has accepted an offer from incoming president Ferdinand Marcos Jr. to be his economic planning chief.

Balisacan, the first confirmed member of the new administration’s economics team, previously served in the same role under President Benigno Aquino from 2012 to 2016.

“I will join the new cabinet, mindful of the immense work needed to accelerate economic recovery and post-recovery development,” Balisacan said in a statement.

Marcos, who won the presidency earlier this month with nearly 60% of the vote, has said political affiliation was not a factor in selecting people to work in his government.

Balisacan, an economist by training, said he looked forward to working with the incoming government and the private sector to help sustain the country’s economic recovery from the pandemic.

Marcos’s economic team will face challenges like the pandemic, elevated inflation and massive government debt.

Marcos, who will be sworn into office on June 30, has yet to fill all cabinet positions. He has nominated his running mate, vice president-elect Sara Duterte-Carpio, to head the education ministry, and named his spokesperson, Vic Rodriguez, as his executive secretary.

(Reporting by Neil Jerome Morales; Editing by Martin Petty and Kanupriya Kapoor)

Biden’s Asian economic talks include 13 countries, and no China

TOKYO, May 23 (Reuters) – President Joe Biden launches his plan for US economic engagement in Asia on Monday, leaving it to the 13 founding countries to work out how to enforce their agreements and if China could ever join.

Biden is unveiling the Indo-Pacific Economic Framework for Prosperity (IPEF) in Tokyo on his first trip in office to Asia.

The White House says the deal offers no tariff relief or market access to the countries that join but provides a way to sort through key issues from climate change to supply chain resilience and digital trade.

And it is critical to Biden’s approach to counter what he sees as Washington’s greatest competitor abroad, China. Washington has lacked an economic pillar to its Indo-Pacific engagement since former President Donald Trump quit a multinational trans-Pacific trade agreement, leaving the field open to China to expand its influence.

“The launch,” said US Commerce Secretary Gina Raimondo, “marks an important turning point in restoring US economic leadership in the region, and presenting Indo-Pacific countries an alternative to China’s approach to these critical issues.”

Biden wants the deal to raise environmental, labor and other standards across Asia. But the actual terms of any agreement will have to be negotiated by the initial countries joining talks: Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, Vietnam and the United States.

Those countries will work together to negotiate what standards they wish to abide by, how they will be enforced, whether their domestic legislatures will need to ratify them and how to consider potential future members, including China, which is not taking part, officials told reporters.

Also left out of the initial talks is Taiwan, which wanted to join.

US National Security Advisor Jake Sullivan told reporters on Air Force One that Taiwan would not be a part of the IPEF launch but that Washington is still looking to deepen its economic relationship with the self-governing island, which China claims.

In a later briefing, Sullivan said the process to include new members “will be part of those initial discussions” in coming weeks.

“On China, broadly speaking, what I just said would apply to that case.”

The IPEF is an attempt to salvage some part of the benefits of participation in a broader trade agreement like the one Trump quit, which is now known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and then known as TPP but without the US domestic political opposition to a deal that some fear would cost jobs.

“TPP, as it was envisioned, ultimately was something that was quite fragile,” said US Trade Representative Katherine Tai. “The biggest problem with it was that we did not have the support at home to get it through.”

Beijing appeared to take a dim view of the planned IPEF.

China welcomes initiatives conducive to strengthening regional cooperation but “opposes attempts to create division and confrontation,” Foreign Minister Wang Yi said in a statement. “The Asia-Pacific should become a high ground for peaceful development, not a geopolitical gladiatorial arena.”

(Reporting by Trevor Hunnicutt and Elaine Lies; Editing by Lisa Shumaker)

As bear market looms, battered Wall Street seeks elusive ‘Fed put’

NEW YORK, May 20 (Reuters) – The Federal Reserve’s determination to raise interest rates until it squashes the highest inflation in decades is darkening the outlook across Wall Street, as US stocks stand on the cusp of a bear market and warnings of a recession grow louder.

At issue is the so-called Fed put, or investors’ belief that the Fed will take action if stocks fall too deeply, even though it has no mandate to maintain asset prices. One oft-cited example of the phenomenon, which is named after a hedging derivative used to protect against market falls, occurred when the Fed halted a rate hiking cycle in early 2019 after a stock market tantrum.

This time around, the Fed’s insistence that it will raise rates as high as needed to tame surging inflation has bolstered the argument that policymakers will be less sensitive to market volatility – threatening more pain for investors.

A recent survey by BofA Global Research showed fund managers now expect the Fed to step in at 3,529 on the S&P 500, compared with expectations of 3,700 in February. Such a drop would constitute a 26% decline from the S&P’s Jan. 3 closing high.

The index, which closed Friday at 3,901.36, is already down almost 19% from that high this year on an intraday basis – close to the 20% decline that would confirm a bear market, according to some definitions.

“The Fed has bigger fish to fry and that’s the inflation problem,” said Phil Orlando, chief equity market strategist at Federated Hermes, who is increasing his cash levels. “The ‘Fed put’ is kaput until the central bank is confident that they’re no longer behind the curve.”

As a result, some investors are digging in for a long slog. BofA’s survey showed cash allocations at a two-decade high, while bets against technology stocks stand at their highest since 2006.

Strategists at Goldman Sachs, meanwhile, earlier this week published a “Recession manual for US equities” in response to client inquiries on how stocks will perform in a downturn. Barclays analysts said that numerous negative near-term catalysts mean the risks for stocks “remain firmly stacked to the downside.”

The S&P 500 closed broadly unchanged on Friday, reversing a sharp intraday decline that had briefly put it into bear market territory. The index marked its seventh straight week of losses, the longest streak since 2001.

Jason England, global bonds portfolio manager at Janus Henderson Investors, believes the index needs to fall at least another 15% for the Fed to slow its tightening, given that unprecedented monetary policy support helped stocks more than double from their March 2020 lows.

“The Fed is being very clear that there will be some pain ahead,” he said.

The Fed has already raised rates by 75 basis points and is expected to tighten monetary policy by 193 basis points this year. Investors will get more insight into the central bank’s thinking when minutes from its last meeting are released on May 25.

2018 REDUX?

Some worry the Fed risks exacerbating volatility if it does not heed possible danger signs from asset prices. Analysts at the Institute of International Finance said stocks may be subject to the same type of selling that rocked markets in late 2018, when many investors believed the Fed tightened monetary policy too far.

“In the past, rising uncertainty and mounting recession risk have had important effects on investor psychology, making markets less tolerant of monetary policy tightening that is seen as no longer warranted,” IIF analysts wrote on Thursday. “The risk of a similar market tantrum (to 2018) is rising again now as markets fret about global recession.”

There have been signs of resilient sentiment among investors. For example, the Cboe Volatility Index, known as Wall Street’s fear gauge, is elevated but below levels it reached during previous major selloffs.

And the ARK Innovation Fund, which became emblematic of the pandemic rally, has brought in net positive inflows of USD 977 million over the last six weeks, Lipper data showed. The fund is down 57% in 2022.

While some investors say those are signals that markets are yet to bottom, others are more hopeful.

Terri Spath, chief investment officer at Zuma Wealth, believes some investors are re-entering parts of the stock market that have suffered outsized losses.

“The Fed is already seeing signs that they won’t be needed as a buyer of last resort,” she said.

Analysts at Deutsche Bank are less optimistic.

“The Fed having badly erred on the side of excess inflation in 2020/21, cannot afford to make the same mistake twice – which favors more financial conditions tightening, and ongoing high (volatility) panicky markets,” they wrote.

(Reporting by David Randall in New York; Editing by Ira Iosebashvili and Matthew Lewis)

Dollar catches a break after bruising week as investors turn risk averse

NEW YORK, May 20 (Reuters) – The US dollar rose against the euro on Friday, as investor unease about the potential economic fallout from Federal Reserve’s efforts to squash inflation bubbled to the surface, souring risk sentiment on Wall Street.

The dollar rose 0.3% against the euro as US stocks tumbled on Friday, putting the S&P 500 Index on the verge of confirming it has been in a bear market since hitting a record high in January.

The session’s gains for the dollar, however, were not enough to erase sharp losses from earlier this week that have pulled the greenback away from a five-year high against the common currency, on worries its months-long rally may have been overdone.

The US currency has been supported in recent months by a flight to safety by investors, amid a rout across markets due to fears of the impact of soaring inflation, a hawkish Federal Reserve and the Russia-Ukraine conflict.

That rally, however, sputtered this week as increased volatility in global financial markets, coupled with the lofty levels the dollar had scaled in recent months, led investors to reach for the safety of the yen and the Swiss franc.

“After its recent rally, the dollar was due a pause,” Jonas Goltermann of Capital Economics, said in a note.

For the week the US currency was down about 1.3%, its worst weekly showing against the euro since early February.

“We see the buck as a bit elevated for sure and see room for other currencies to flourish as there is a gradual shift to better prospects if the global economy is to be helped out and revived from a terrible first half to the year,” said Juan Perez, director of trading at Monex USA in Washington.

Other safe-haven currencies have rallied this week as global equities have come under pressure, although stocks in Europe clawed back some ground on Friday.

The Swiss franc was on track for a near 3% weekly gain versus the dollar, its best weekly gain in more than two years, while the Japanese yen was set for an almost 1% weekly gain.

Sterling, up 0.1% on Friday, was set for its biggest weekly gain since December 2020 against the dollar as the latest economic data suggested the market might not need to scale back its expectations for Bank of England rate hikes much further.

In cryptocurrencies, generally weak risk appetite took its toll on bitcoin, which fell 4.23% to USD 29,009.94.

(Reporting by Saqib Iqbal Ahmed; Editing by Alison Williams and Nick Zieminski)

Bear market beckons as stock volatility continues in 2022

NEW YORK, May 20 (Reuters) – The stock market’s brutal year neared a grim milestone as the S&P 500’s slide on Friday threatened to leave it in a bear market for the first time since March 2020, fueled by worries over sky high inflation, a hawkish Federal Reserve and future economic growth.

The benchmark S&P 500 index fell below 3837.248 during Friday’s session, a decline that on an intraday basis put it more than 20% below its Jan. 3 record closing high. However, the index closed above that level, and did not confirm it was in a bear market – frequently defined as a drop of at least 20% from a closing high.

If history is any guide, a bear market would mean more pain could be in store for investors. The S&P 500 has fallen by an average of 32.7% in 13 bear markets since 1946, including a nearly 57% drop during the 2007-2009 bear market during the financial crisis, according to Sam Stovall, chief investment strategist at CFRA.

It has taken a little over a year on average for the index to reach its bottom during bear markets, and then roughly another two years to return to its prior high, according to CFRA. Of the 13 bear markets since 1946, the return to breakeven levels has varied, taking as little as three months to as long as 69 months.

The S&P 500 surged some 114% from its March 2020 low as stocks benefited from emergency policies put in place to help stabilize the economy in the wake of the COVID-19 pandemic.

That decline went into reverse at the start of 2022 as the Fed grew far more hawkish and signaled it would tighten monetary policy at a faster-than-expected clip to fight surging inflation. It has already raised rates by 75 basis points this year and expectations of more hikes ahead have weighed on stocks and bonds.

Fed Chairman Jerome Powell has vowed to raise rates as high as needed to kill inflation but also believes policymakers can guide the economy to a so-called soft landing.

Adding to the volatility has been the war in Ukraine, which has caused a further spike in oil and other commodity prices.

A few areas of the stock market have been spared. Energy shares have soared this year, along with oil prices, while defensive groups such as utilities have held up better than broader markets.

On the flip side, shares of technology and other high-growth companies have been hit hard. Those stocks — high fliers during much of the bull market over the past decade — are particularly sensitive to higher yields, which dull the allure of companies whose cash flows are weighted more in the future and diminished when discounted at higher rates.

Some of the biggest of these companies, such as Tesla (TSLA) and Facebook owner Meta Platforms (FB), are also heavily weighted in the S&P 500 index.

Investors have looked at various metrics to determine when markets will turn higher, including the Cboe Volatility Index, also known as Wall Street’s fear gauge. While the index is elevated compared to its long-term median, it is still below levels reached in previous major selloffs.

(Reporting by Lewis Krauskopf; Editing by Kirsten Donovan and Ira Iosebashvili)

US yields slide for third day as growth worries persist

NEW YORK, May 20 (Reuters) – US Treasury yields fell for a third straight session on Friday, as investors remained concerned about growing signs of an economic slowdown even as the Federal Reserve vowed to stay aggressive with monetary tightening to stamp out persistently high inflation.

“Concerns over slowing growth are taking hold with more analysts warning of not just stagflation, but recession,” said Kim Rupert, managing director, fixed income at Action Economics in San Francisco.

“The hits to margins that have been seen in Target, Walmart, and the like, due to rising costs of labor, materials, energy, and transportation are seen as potential harbingers of the worrisome future ahead,” she added.

Fed funds futures were firmer, suggesting that the US rate market has pulled back a bit from some of its more extreme rate hike estimates on the view that the Federal Reserve may have to scale back on its tightening plan, involving multiple 50 basis-point increases, as the economy slows down.

The rates market on Friday had priced in a fed funds rate of 2.783% at the end of next year, compared with the current level of 0.83%. That was as high as 2.9% two weeks ago.

BofA Securities, in its latest research note, said there had been a “market sea change in rate views” over the last two weeks. It reaffirmed its call last month of going long duration when the 10-year yield was between 2.8%-2.85%.

The US bank cited several factors such as yields having overshot fundamentals, Fed pricing looking full, growth and inflation easing and signs of an economic slowdown in surveys.

In mid-morning trading, the benchmark US 10-year yield slipped 2.2 basis points to 2.833%.

The 30-year yield fell as well, dipping 2.4 bps to 3.041%.

On the front end of the curve, US two-year yields were little changed at 2.613%.

The yield curve flattened again on Friday, with the spread between US two- and 10-year yields narrowing to 21.2 bps. It has flattened in the four of the last five sessions.

“The curve flattening dynamic should persist until the Fed pivots dovish driven by early signs of softening employment & a higher unemployment rate,” BoFA wrote in its note.

May 20 Friday 10:26 AM New York/1426 GMT

	Price	Current Yield %	Net Change (bps)
Three-month bills	1.03	1.0469	0.000
Six-month bills	1.465	1.4962	-0.006
Two-year note	99-201/256	2.6139	0.003
Three-year note	99-242/256	2.7691	-0.008
Five-year note	99-156/256	2.8351	-0.014
Seven-year note	100-32/256	2.8548	-0.022
10-year note	100-104/256	2.8279	-0.027
20-year bond	100-100/256	3.2232	-0.029
30-year bond	96-196/256	3.0402	-0.025
DOLLAR SWAP SPREADS
	Last (bps)	Net Change (bps)
US 2-year dollar swap spread	27.75	-1.75
US 3-year dollar swap spread	12.75	-1.50
US 5-year dollar swap spread	3.00	-0.25
US 10-year dollar swap spread	6.00	-0.25
US 30-year dollar swap spread	-27.00	-0.50

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Alison Williams)

Wall Street rises as growth stocks gain after two days of selloff

May 20 (Reuters) – U.S. stock indexes rose on Friday led by megacap growth and healthcare shares at the end of a volatile week, roiled by concerns over the impact of rising inflation on earnings and the fallout of rate hikes on economic growth.

Nine of the 11 major S&P sectors advanced in morning trade. Energy was the top performer, up 2.2%, followed by healthcare and technology sectors.

Microsoft Corp MSFT.O, Amazon.com (AMZN) and Apple Inc. (AAPL), rose between 1.5% and 1.8%, providing the biggest boost to the S&P 500 and the Nasdaq.

“Some traders are taking advantage of the price weakness, at least in the short term, to make some money. The real question is whether this will last by the end of the day,” Sam Stovall, chief investment strategist at CFRA Research, said.

“It is definitely going to be a traders’ battle today. The market is trying to orchestrate at least a near-term relief rally, which is normal within bear market trends.”

Disappointing forecasts from big retailers Walmart Inc. (WMT) and Target Inc. (TGT) rattled market sentiment this week, adding to evidence that rising prices have started to hurt the purchasing power of U.S. consumers.

The S&P 500 and the Nasdaq are set for their seventh straight week of losses, their longest losing streak since the end of dotcom bubble. The Dow is on track for its eighth consecutive weekly decline, its longest since 1932, during the Great Depression.

The indexes are down between 13.3% and 26.1% so far this year as investors adjust to supply-chain snarls, lockdowns in China, geopolitical uncertainty stemming from the Ukraine conflict and the U.S. Federal Reserve raising rates.

Traders are pricing in 50-basis point rate hikes by the US central bank in June and July.

The benchmark index is down about 18.1% from its record close on Jan. 3. A close of 20% or more below that level will confirm the S&P 500 has been in a bear market since hitting the peak.

At 10:01 a.m. ET, the Dow Jones Industrial Average was up 189.32 points, or 0.61%, at 31,442.45, the S&P 500 was up 34.31 points, or 0.88%, at 3,935.10, and the Nasdaq Composite was up 117.90 points, or 1.04%, at 11,506.40.

Asian and European shares rebounded on Friday after China cut a key lending benchmark to support its economy.

Among other stocks, Ross Stores (ROST) plunged 23.3% after the discount apparel retailer cut its 2022 forecasts for sales and profit, while Vans brand owner VF Corp. (VFC) gained 4.5% on strong 2023 revenue outlook.

Deere & Co. (DE) slid 10% after the heavy equipment maker posted downbeat quarterly revenue.

Match Group Inc. (MTCH) climbed 4.6% to the top of S&P 500 index as Alphabet Inc.’s (GOOGL)_ Google would allow the dating apps maker to offer users a choice in payment systems.

Advancing issues outnumbered decliners by a 2.28-to-1 ratio on the NYSE and by a 2.03-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and 36 new lows, while the Nasdaq recorded 11 new highs and 143 new lows.

(Reporting by Amruta Khandekar and Devik Jain in Bengaluru; Editing by Shounak Dasgupta and Arun Koyyur)

Oil settles up as supply risks outweigh economic worries

NEW YORK, May 20 (Reuters) – Oil prices settled slightly higher on Friday as a planned European Union ban on Russian oil and easing of COVID-19 lockdowns in China countered concerns that slowing economic growth will hurt demand.

Brent LCOc1 futures for July delivery rose 51 cents, or 0.5%, to USD 112.55 a barrel. US West Texas Intermediate (WTI) crude for June rose USD 1.02, or 0.9%, to settle at USD 113.23 on its on its last day as the front-month.

WTI notched its fourth straight week of gains, which it last did in mid-February. Brent gained about 1% this week after falling about 1% last week.

The more actively-traded WTI contract for July was up about 0.4% to USD 110.28 a barrel.

“The risks remain tilted to the upside … given the Chinese reopening and continued efforts towards a Russian oil embargo by the EU,” said Craig Erlam, a senior market analyst at OANDA.

In China, Shanghai did not signal any change to its planned end of a prolonged city-wide lockdown on June 1 even though the city announced its first new COVID-19 cases outside quarantined areas in five days.

The energy market expects the lifting of some coronavirus restrictions in Shanghai to boost energy demand. China is the world’s top crude importer.

The EU is hoping to clinch a deal on a proposed ban of Russian crude imports which includes carve-outs for member states most dependent on Russian oil, such as Hungary.

“Odds of an EU embargo being declared sooner rather than later increased in the wake of Germany’s success in cutting Russian oil imports by more than half in a very short period,” consultancy BCA research said in a note.

German big business is drafting a plan to use an auction system to help ration available supplies in the event Russia cuts off its gas, although some fear it could punish smaller firms.

In the United States, US energy firms this week added oil and natural gas rigs for a ninth week in a row, according to the Baker Hughes rig count, as mostly small producers respond to high prices and prodding by the government to ramp up output.

The rig count is an indicator of future output growth.

Americans continued to get behind the wheel even though gasoline prices at the pump keep hitting record highs. Auto club AAA said national average regular unleaded gasoline prices hit a record USD 4.59 per gallon on Friday.

In India, crude oil imports in April were the highest in 3-1/2 years as the world’s third biggest oil importer and consumer ramped up discounted Russian oil purchases to fuel demand recovery and fight high prices.

In Norway, crude output in April missed official forecast by 10.6%, while its gas production was in line with expectations.

(By Scott DiSavino; Additional reporting by Noah Browning in London and Sonali Paul in Melbourne; Editing by Marguerita Choy, Susan Fenton and David Gregorio)

Philippines central bank sees reform continuity, solid growth this year

MANILA, May 20 (Reuters) – The Philippine central bank chief said on Friday president-elect Ferdinand Marcos Jr. is better placed than his predecessor to face economic challenges and that he expects structural reforms and infrastructure build-up will continue under the new administration.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno, speaking at an Asian Development Bank Institute forum, said there are clear indications that key reforms will continue under Marcos, who takes office next month and will command a supermajority in Congress.

A smooth transition of power, and the newly-elected leader’s “overwhelming mandate” should help sustain economic growth and investor confidence, he said.

“They have also indicated that they are going to continue what’s being done by the current administration, which is strong on public infrastructure,” Diokno said, referring to Marcos and his political allies that include Vice President-elect Sara Duterte-Carpio, the incumbent leader’s daughter.

Diokno also said the next administration will inherit “a better state of infrastructure” and a “more robust economy”, putting this year’s growth on track to hit the 7%-9% target.

But like the rest of the world, he said the Philippines faces risks to its growth outlook, such as a deterioration in the COVID-19 situation and a prolonged Russia-Ukraine conflict.

The BSP has taken measures to sustain the growth momentum by addressing rising inflationary pressures, with a 25 basis points increase in interest rates effective Friday, its first hike since 2018.

Diokno said the BSP’s policy tightening cycle has begun, adding that its “exit strategy” after undertaking “extraordinary” measures to support the pandemic-hit economy will be rolled out in a gradual manner.

The BSP’s policy actions will be “well-communicated” and guided by the inflation and growth outlook over the medium term as well as the public health situation, he said.

(Reporting by Karen Lema and Enrico Dela Cruz; Editing by Ed Davies and Kanupriya Kapoor)

‘Retail apocalypse’: Wall Street shaken by inflation-induced earnings hits

NEW YORK, May 19 (Reuters) – Walmart, Target and Kohl’s were among major retailers that reported earnings this week that missed Wall Street expectations by the widest margin in at least five years, underscoring the wallop four-decade-high inflation is bringing to US shoppers’ wallets and retailers’ bottom lines.

Among 145 retailers that have reported first-quarter earnings so far, 127 mentioned inflation and 138 flagged supply chain issues, according to Refinitiv data.

Higher staffing costs, bloated inventories and more expensive fuel took a toll on retailer profits, contributing to a market rout that saw Wall Street post its worst day since mid-2020 on Wednesday.

Department store chain Kohl’s Corp. (KSS) on Thursday became the latest to cite soaring inflation in posting a 92% decline in adjusted profit.

Chief Executive Michelle Gass blamed higher freight and wage costs and lower clothing demand for adjusted earnings of 11 cents per share that was 59 cents short of analysts’ estimates, a gap of nearly 85%.

Walmart Inc. (WMT), the nation’s largest retailer, posted a quarterly profit that fell 25%, marking its first miss in five quarters. The gap of 12.3% between Wall Street’s expectations and Walmart’s earnings per share figure was its widest since at least 2017.

For rival Target Corp. (TGT), which saw its profits halve, that margin between expectation and reality was 29%, which was also its biggest in at least five years, according to Refinitiv.

“This is a little bit of a retail apocalypse. It was Walmart (on Tuesday) and everybody thought it was a one-off,” said Dennis Dick, a trader at Las Vegas-based Bright Trading LLC.

“Now that Target missed earnings (by) a lot more than Walmart even did, they’re scared that the consumer is not as strong as everybody thinks.”

While Wall Street brokerages were expecting profits to be pressured by soaring fuel costs, analysts said they were caught off guard by the rapid retrenchment among consumers and shifts toward buying lower-margin basics instead of more profitable general merchandise.

The extent of inventory buildup and heavy discounting by retailers was also a bit of a shock, they said.

“The biggest surprise was the inventory markdowns and rollbacks (in prices). I don’t think any analyst was expecting that,” CFRA analyst Arun Sundaram told Reuters.

AJ Bell Investment Director Russ Mould called the inventory figures “startling.”

Target’s inventories were up 43% in the first quarter, as unsold televisions and bulky kitchen appliances piled up, while Walmart’s rose 32% in the quarter.

In some ways, the retailers are victims of their own success after figuring out how to keep stores relatively well stocked in the midst of supply snarls, truck driver shortages and on-and-off lockdowns intended to curb the spread of COVID-19.

Sundaram said Target’s wider earnings miss was due partly to a greater emphasis on general merchandise sales compared to Walmart, which focuses more on selling groceries and other essentials.

Wall Street is also “angry” about the lack of warning from Walmart and Target, which gave upbeat outlooks for 2022 a little over two months ago, said Jane Hali, CEO of investment research firm Jane Hali & Associates.

The financial impacts of the war in Ukraine and prolonged COVID lockdowns in China likely played a part in the stark turnaround in companies’ predictions for the year, she added.

“Wall Street is panicked,” Hali said. “Target had an investment day not too long ago, where they made no mention of the issues they highlighted on Wednesday. So I can understand the Street being angry about that.”

(Additional reporting by Devik Jain in Bengaluru; Editing by Bill Berkrot)

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