LIVE MARKETS-Consumer-related US reports may suggest spending issues ahead

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CONSUMER-RELATED US REPORTS MAY SUGGEST SPENDING ISSUES AHEAD

Results from some consumer-facing U.S. companies in the just-finished U.S. earnings season suggest shoppers are being affected by tariff uncertainties, according to Wells Fargo Investment Institute.

"We believe the deferral of tariffs does not mean they'll be eliminated," the firm says in a note, adding it sees tariffs likely squeezing households and limiting consumer spending into late 2025 and early 2026. That could dilute the positive effects of tax cuts and deregulation, it says.

The U.S. Supreme Court agreed earlier this week to decide the legality of President Donald Trump's sweeping global tariffs.

WFII has an "unfavorable" outlook for both the consumer discretionary and consumer staple sectors.

Second-quarter earnings growth for the S&P 500 consumer discretionary sector .SPLRCD was at 7.1% year-over-year while it was at just 0.9% for consumer staples .SPLRCS, according to LSEG data. S&P 500 earnings growth overall was at 13.3% for the second quarter, based on data Friday.

Procter & Gamble PG.N in July forecast annual results largely below estimates and said it would raise prices on some products in the U.S., a day after naming insider Shailesh Jejurikar as CEO to steer it through tariff uncertainty.

Walmart WMT.N in August reported second-quarter profit that was lower than expected, registering the retailer's first earnings miss in more than three years. Still, its results suggested U.S. consumers across the spectrum are still going to Walmart's stores.

(Caroline Valetkevitch)

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