Must read: Jackson Hole, UK inflation, Walmart

As earnings season dies down in the US, attention turns to the Fed’s gathering of global central bankers at Jackson Hole. Fed Chair Jay Powell’s address will take centre stage as investors hunt for clues into the central bank’s next moves. Aside from that, results from Walmart Inc (NYSE:WMT) and data on UK inflation are in focus next week.

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UK INFLATION 

Next week’s Office for National Statistics (ONS) data is expected to see another rise in UK inflation for July, after hitting 3.6% in June, the highest since January 2024, and 3.4% in May.   

Inflation is running much hotter than the UK government and the Bank of England would like and there are growing concerns about the persistency of price pressures in the economy. 

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Although inflation has retreated significantly from the Covid-era peak of 11% in 2022, inflationary pressures have resurfaced lately with the Bank of England projecting that the consumer price index (CPI) will rise further to 4% in the months ahead. There are particular worries about domestic food price inflation (which it 4.5% in June, higher than that in the euro area), as well as uncertainty around how Trump’s tariffs could push up prices.  

With inflation considerably higher than the Bank of England’s 2% target, the central bank has less wiggle room to loosen monetary policy which would help to support the UK’s sluggish economy. The central bank was far from unanimous in last week’s decision to cut rates, which raises concerns about the potential for a scenario of higher for longer interest rates. 

WALMART 

Walmart prepares to deliver its latest quarterly earnings on Thursday 21 August. 

Walmart is a bellwether for the strength of the American consumer as the largest retailer in the United States selling everything from groceries to electronics, clothing and toys.  

With Trump’s trade policy impacting US consumer confidence and prices, investors will be paying close attention to see whether the import levies have hit Walmart’s top and bottom lines as well as prices on the shelves. As a company that prides itself on rock-bottom prices, Walmart has already expressed frustration about the extra costs associated with tariffs, particularly from China. 

Last quarter, Walmart said prices were growing up while it reported a beat on earnings but a slight miss on sales. For the fiscal full-year Walmart has pencilled in sales growth of between 3% and 4% and anticipates adjusted earnings per share of around $2.50 to $3.50. 

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Walmart delivered its first-ever profitable quarter in e-commerce both domestically and globally in May, so focus next week will be on whether it can continue to grow earnings there. The company has also been targeting fast deliveries and more households – it is close to achieving its goal of reaching 95% of the US population in up to three hours. Investors will be watching out for the performance of Walmart’s advertising and its membership subscription Walmart+ as well as the retailer looks to bring in a diversity of revenue streams.

Walmart shares have had a good run lately, rallying around 50% over the past 12 months, outperforming the S&P 500 and rivals like Costco Wholesale Corp (NASDAQ:COST). Analysts are optimistic towards Walmart’s outlook too with a consensus buy recommendation on the stock.