5 things to know before the stock market opens Tuesday, August 16th

Traders work on the floor of the New York Stock Exchange (NYSE), August 15, 2022.

Brendan McDermid | Reuters

Here are the most important news that investors need to start their trading day:

1. A Quiet Morning Stocks

US stock markets appeared to be heading towards a flat open on Tuesday morning after the three major indexes rose on Monday. In fact, the Dow Jones Industrial Average closed above its 200-day moving average for the first time since April. Investors are also getting their first taste of big retail earnings on Tuesday as Home Depot and Walmart reported their latest quarterly results (see below). Stocks had a generally solid summer after a grueling first half of the year, leading some market watchers to point to the start of a new bull market. But not so fast. The markets in September could be bumpy, writes CNBC’s Patti Doom.

2. Walmart sticks to its future outlook

Philip Radwansky | Light Rocket | Getty Images

The retail giant posted healthy earnings and revenue on Tuesday morning, while remaining sticking to its expectations for the second half. Previous disclosures paved the way for the findings. Last month, Walmart warned that its profits would shrink because customers, struggling with rising inflation, seek deals on lower-margin items like groceries because they avoid more profitable discretionary items like electronics. The retailer, like others in the space, had to work through the glut of excess inventory as well, as shoppers changed their behaviors. Earnings aren’t the only big news for Walmart this week. The retailer on Monday announced a deal to offer the streaming service Paramount+, home of “Paw Patrol” and “Star Trek: Strange New Worlds,” to Walmart+ subscribers.

3. Home Depot Reports

Home Depot location in Encinitas, California.

Mike Blake | Reuters

The home improvement retailer beat Wall Street expectations in top and bottom line earnings. The company also stuck to its forecast for the year, even as Americans struggle with rising inflation. Home Depot sales reflect the strength of discerning consumers who hire professional contractors. “Our performance reflects continued strength in demand for home improvement projects,” Home Depot CEO Ted Decker said in a statement accompanying the earnings announcement. It wasn’t all rosy, though: The company said total customer transactions fell to 467.4 million from 481.7 million in the prior year quarter. Lowe’s, the rival home improvement retailer that caters more to the DIY audience and can provide a clearer picture to the general consumer, announced its earnings Wednesday morning.

4. “Residential stagnation”

The housing market continues to take strange turns. Homebuilders’ sentiment has slipped into negative territory this month, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Other than a brief moment in the early days of the Covid pandemic, it’s the first time this has happened since 2014, CNBC’s Diana Olek reports. “Tighter monetary policy by the Federal Reserve and persistently high construction costs have led to a housing slump,” said Robert Dietz, chief economist at NAHB. Mortgage rates are down from recent highs, but still double what they were at the beginning of the year. Home prices are also still rising, and supply remains tight.

5. Studios look to old films to fill in receipts

Tom Holland is Spider-Man in the Sony-Marvel movie “Spider-Man: No Way Home”.

Sony

“Top Gun: Maverick” cannot continue printing money forever. We’re officially in the doldrums of the summer box office season. August and September are somewhat weak months for big new releases, but this year is especially weak because studios, disrupted by the Covid pandemic, don’t have a lot of products to roll. So two of the biggest players, Disney and Sony, are heading into some old favorites in the juice business. Sony’s Spider-Man: No Way Home, which has already grossed more than $1.8 billion worldwide, will return in September. Meanwhile, Disney is promoting two big releases with two reissues. Ahead of the Disney+ series, “Andor,” studio releases 2016’s “Rogue One: A Star Wars Story,” and re-releases 2009’s “Avatar” to draw major interest in the long-awaited sequel, Avatar: The Way of Waters, due in December).

CNBC’s Carmen Renick, Melissa Rybko, Jack Stebbins, Diana Olek, and Sarah Whitten contributed to this report.

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