Walmart, the largest retailer in the U.S., has announced that it will no longer advertise on the social platform X. This decision comes after other companies abandoned the platform due to owner Elon Musk's endorsement of an antisemitic post. The exact timing and motivation behind Walmart's change have not been disclosed. This move by Walmart reflects the growing concern over the content and actions of social media platforms.
In addition to Walmart's decision, a recent article in the Financial Times highlights Walmart's position in the retail industry. The article states that Walmart, as a strong player in a capital-intensive industry, has a narrower growth and profitability gap compared to Alphabet, the parent company of X. This suggests that Walmart may have a safety premium, which could contribute to its decision to distance itself from controversial platforms like X [bb17913c].
Meanwhile, Federal Reserve Chair Jerome Powell has addressed expectations of interest-rate cuts. Powell stated that the committee will proceed cautiously with borrowing costs and indicated that interest rates are expected to remain steady in the upcoming December meeting. However, due to a slowing U.S. economy and a fall in the inflation rate, investor expectations of rate cuts starting in March have increased. Despite Powell's comments, the market has raised the odds of a quarter-point rate cut by the Federal Open Market Committee's March meeting to over 50%.
The combination of Walmart's decision to boycott X and the uncertainty surrounding interest rates adds to the challenges faced by the retail sector and the overall economic climate.