When the grey skies turn to blue, meet me on a bright and windy day. Chris Rea

A large, well-known US retailer’s shares fell around 6% after posting numbers that just about met expectations whilst offering a slightly cautious outlook for the year ahead. Chief Financial Officer John David Rainey said, “there are still uncertainties related to consumer behaviour and global economic and geopolitical conditions.” The company is Walmart, probably one of the best-known discount retailers in the world. The first thing of note is that this company’s shares have been up over 65%  in the past year, now trading on a forward multiple of close to 40 times, which feels extraordinary, quite a re-rating. Its 10-year average has been around half that. A company whose sales are expected to grow by 4% in the coming year. No doubt it’s a quality company, but some profit-taking could hardly have been unexpected. Whether these results indicate the US consumer is not quite as strong as thought, time will tell. That news put a gentle dent in US stocks overall.

The minutes of the last Fed meeting in January were released on Wednesday. Policymakers expressed concern about stubborn inflation and the potential effect of Trump’s policy proposals, particularly tariffs. The minutes indicated committee members would be minded to cut should employment numbers weaken. Overall, the minutes provided a message that the market already knew and did not do much to change the market expectations for rates this year.

This weekend, the German people go to the polls at a time when economic sentiment, according to the latest ZEW sentiment survey, suggests sentiment is as bad as it has ever been. Yet the German market is at all-time highs; investors seem relaxed about the threat of tariffs on German goods. Friedrich Merz of the CDU is the favourite to come away with the top job of Chancellor. The real question is how the three major parties will fare and what sort of coalition will be formed at the end of voting.

The latest GfK consumer expectations gauge came in at -31, reflecting the gloomy mood of the British household that has persisted since the last budget. This morning, we got the latest retail sales data, which came in ahead of expectations, possibly a little surprising. Sales volumes rose by 1.7% during January 2025, following a 0.6% fall in December. The jump was mainly food-related; when one looks deeper into the numbers, one sees that clothing and household goods sales fell. The pound remains resilient against the dollar, and European markets appear to start the day on a positive note.