If you want to know how Walmart (WMT) feels about the potential impact of tariffs and inflation on its business, there’s this: CEO Doug McMillon was one of three high-profile executives who recently met with President Donald Trump to warn him about how sweeping tariffs could slam the retail sector and economy at large.
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McMillon, along with the CEOs of Target and Home Depot, told Trump his tariffs could affect global supply chains and “lead to empty shelves,” CBS News reported.
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The closed-door meeting, held on Monday, April 21, had an immediate impact. Scott Bessent, the Treasury secretary, said the administration would try to de-escalate the tariff situation with China, CNN reported. Trump also backed off earlier threats to remove Federal Reserve Chairman Jerome Powell because of frustration over Powell’s monetary policy.
The stock markets rallied on the news, temporarily halting a period of extreme volatility and massive sell-offs. So should you buy Walmart’s stock in the current environment? Here are four reasons you might want to hold your shares — and not buy or sell right now.
There’s a reason Walmart became the world’s biggest retailer. It dominates its sector, produces steady profits, and has done a good job adapting to shifting market trends and technologies. But that doesn’t mean the company is immune to negative economic and business forces. When those forces work against it, shareholders could suffer.
“When the CEOs of Walmart, Target and Home Depot show up together, it’s not a social call,” said Edward Corona, a Florida-based trader and publisher of The Options Oracle Newsletter. “It’s a collective, ‘Hey, these tariffs are going to hurt everyone, especially our customers.’”
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About two weeks after Trump won a second term in November, Walmart’s chief financial officer, John David Rainey, said the retailer might have to raise prices on certain items if Trump made good on his tariff threats, CNBC reported.
That’s never good news for Walmart (or its customers) because so much of its success is due to the low prices it charges.
“Walmart’s whole business is built on having the lowest prices around — cheaper than pretty much anyone else. That’s always done well for them,” said Anthony Grosso, a New York-based financial strategist and mortgage loan originator. “With all the talk lately about tariffs, especially with China, any new ones are going to hit their bottom line.”
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