Here are the top news, trends and analysis that investors need to start their trading day:
1. Stock futures jump as two Dow Jones stocks move in opposite directions
Traders on the floor of the New York Stock Exchange, May 16, 2022.
US stock futures rose on Tuesday, with the S&P 500 and Nasdaq poised to open nearly 1.5% and about 2%, respectively. The Dow Jones Industrial Average looked ready to open nearly 350 points, or more than 1%, higher.
- That’s despite a nearly 6% pre-market decline in the Dow and Walmart component after mixed quarterly results due to higher costs.
- A different story at Home Depot, which survived inflation. Dow Jones stock rose 3.5% in the primary market after stronger quarterly results.
- United Airlines rose 4% on Tuesday, in the morning after raising its current quarter revenue forecast, forecasting its busiest summer since before the Covid pandemic began.
- In a volatile session on Monday, after a series of multi-week losses, the Dow rose slightly and the S&P 500 fell slightly. Nasdaq lost 1.2%.
The 30-year Treasury yield rose on Tuesday to around 2.95% after the government’s release before the bell showed a slightly less-than-expected 0.9% increase in retail sales in April on a monthly basis. On an annual basis, retail sales rose 8.2%. The March numbers were revised sharply higher. Investors are hoping to learn from all the retail numbers how consumers are reacting to rampant price pressures — and thus, whether the Federal Reserve may need to raise interest rates to fight inflation.
2. Wal-Mart fell to mixed results, swayed by high price pressures
Workers move shopping carts outside a Walmart store in Lakewood, California, United States, on Sunday, May 15, 2022.
Bing Guan | Bloomberg | Getty Images
Walmart on Tuesday reported first-quarter earnings that missed expectations by a wide margin. The country’s largest grocer and retailer felt pressure from rising food and fuel costs. Quarter revenue exceeded estimates. That mixed picture moved to Walmart’s guidance, raising its sales forecast this year but lowering its earnings forecast. Chief Financial Officer Brett Bigs told CNBC that Walmart employees returning from Covid are leaving more quickly than expected, causing the company to overburden.
3. Home Depot prices rose after strong results that exceeded inflation rates
Home Depot store in Livermore, California, US, on Thursday, May 12, 2022. Home Depot Inc. is scheduled to release. Earnings figures for May 17th. Cameraman:
David Paul Morris | Bloomberg | Getty Images
Despite rising inflation, consumers were still willing to spend money on their homes, and Home Depot doesn’t expect that trend to reverse. The company on Tuesday reported better-than-expected earnings and revenue for the first quarter. Home Depot raised its full-year forecast, and now expects sales to increase about 3% and EPS growth in average single digits on a percentage basis. First-quarter results refer to the first quarter of new CEO Ted Decker’s presidency.
4. Musk says Twitter deal ‘can’t go ahead’ until he gets clarification on bots
Elon Musk, during an event at SpaceX headquarters in Hawthorne, California, US, on Thursday, October 10, 2019.
Bloomberg / Getty Images
Elon Musk said his $44 billion purchase of Twitter won’t go ahead until he has more clarity on the number of fake accounts. Twitter estimated in a filing earlier this month that the number was less than 5% in the first quarter. But Musk, the CEO of Tesla and SpaceX, puts the number of robots at around 20% and fears that may be higher. Twitter shares fell 1% in the first market on Tuesday. The stock has erased all the gains made since Musk revealed his investment in the social network on April 4, and is no longer close to its $54.20 per share takeover offer.
5. Buffett’s Berkshire buys a large batch of new stock in the first quarter
Warren Buffett at a press conference during a shareholder meeting in Berkshire Hathaway, April 30, 2022.