Investing.com - Top 5 things that rocked U.S. markets this week:
1. Walmart Leads on Retail Earnings; Chips See Weakness
The earnings calendar began to lighten up this week, but there were still enough major reports to move the market, especially in the retail sector.
The broader market tends to perform well if retail is humming along, as consumer spending accounts for as much as 70% of U.S. economic growth.
Walmart (NYSE:WMT) reported quarterly earnings that topped consensus and raised its full-year earnings guidance.
Home Depot (NYSE:HD) lifted its full-year guidance for both revenue and same-store sales. But Macy’s (NYSE:M) shares struggled on margin concerns.
Chip stocks were hit by a double dose of weak guidance after the bell Thursday. Nvidia (NASDAQ:NVDA) issued softer-than-expected guidance. And Applied Materials (NASDAQ:AMAT) forecast weaker-than-expected earnings per share.
On the positive side in tech, Cisco Systems (NASDAQ:CSCO) beat on both the top and bottom lines and the company forecast better-than-expected numbers for its fiscal first quarter.
2. U.S. and China Going Back to the Table on Trade
Talks of trade rapprochement between the U.S. and China helped ease the nagging tariff tensions in stocks.
China said it will hold a fresh round of trade talks with the U.S. in Washington later this month, offering a glimmer of hope for progress in resolving a conflict that has set world markets on edge.
A Chinese delegation led by Vice Minister of Commerce Wang Shouwen will meet with U.S. representatives led by Under Secretary of Treasury for International Affairs David Malpass, the Ministry of Commerce said in a statement on its website.
The upcoming meeting, which is lower-level compared with four previous rounds of talks, comes at the invitation of the U.S., according to the statement.
3. Turkish Lira Roller Coaster Continues
The Turkish lira took currency traders on another wild ride this week, keeping bank stocks, especially in Europe, on the back foot.
The struggling currency sank to an all-time low of 7.2393 on Monday amid growing concern over a deepening diplomatic rift with the United States over Ankara's detention of Andrew Brunson, an American pastor detained in 2016.
It found its footing Tuesday, after the country's central bank pledged to provide liquidity in response to the meltdown.
On Friday, Turkey remained in the spotlight as U.S. Treasury Secretary Steven Mnuchin’s announced that the U.S. is prepared to slap Turkey with more sanctions if its President Recep Tayyip Erdogan refuses the quick release of Brunson.
The Turkish lira has lost almost 50% of its value this year, largely over worries about Erdogan's growing influence over the economy, his repeated calls for lower interest rates in the face of high inflation and worsening ties with the U.S.
4. Economic Numbers Lack Clear Direction
Wall Street dealt with mixed economic data over the week.
On Friday, the University of Michigan reported a drop in its preliminary measure of August consumer sentiment, which surprised the market. The measure of 95.3 was down from July. Economists were looking for a rise to 98.1.
But July retail sales, and core retail sales, which exclude autos, came in above expectations.
Housing data was mixed. Housing starts for July rose less than economists anticipated. But building permits, an indicator of future demand, were stronger than forecasts for the month.
And the Philadelphia Fed index fell sharply to the lowest reading since November 2016.
The Philadelphia Federal Reserve said its manufacturing index fell by 14 points to 11.9 from 25.7 in July. The consensus forecast had been for a reading of 21.9.
5. Gold Falls Sharply for the Week; Copper in a Bear Market
Gold prices were on track for their biggest weekly loss since April 2017, as worries about demand from China and contagion from Turkey’s currency crisis. And copper fell into bear-market territory during the week.
Gold was also hit by strength in the dollar, as a stronger greenback makes gold more expensive for holders of foreign currency.
In China, data showed fixed-asset investment rose less than anticipated, as did factory output.
Copper prices sank on indications of China weakness and were hit by easing supply concerns. BHP Billiton (LON:BLT) and the union at the world’s biggest mine in Chile agreed to put a new wage offer to a vote by workers, potentially saving the industry from a strike that threatened to disrupt supply at a time of shrinking stockpiles.