5 Things to Know Before the Stock Market Opens on Thursday, May 19
Here are the most important news, trends and analysis that investors need to start their trading day:
1. The Dow will open lower after its worst day since 2020 on inflation worries.
A trader works on the trading floor of the New York Stock Exchange (NYSE) in Manhattan, New York, USA on May 18, 2022.
Andrew Kelly | Reuters
- Wednesday’s sell-off accelerated throughout the session as inflation-driven Target’s lack of earnings confirmed the same story from Walmart a day earlier. Walmart and Target dropped slightly in premarket prices again on Thursday. They both failed on their worst days since 1987 after their respective earnings reports on Tuesday and Wednesday.
- Spirit Airlines’ board on Thursday unanimously recommended that shareholders reject JetBlue’s tender offer at $30 per share. Spirit said the JetBlue deal has little chance of overcoming regulatory hurdles. The ultra-discount carrier said it is advancing its plan to merge with rival airline Frontier Airlines. In premarket trading, Spirit shares fell 2% to less than $19 a share, while JetBlue shares fell less than 1% and Frontier shares fell more than 3%.
2. Kohl is missing out on earnings data and cutting prospects, anticipating buyout offers soon.
The Kohl’s logo is displayed on the facade of a Kohl’s store on January 24, 2022 in San Rafael, California.
Justin Sullivan | Getty Images
The retail collapse continued in premarket Thursday as stocks Quotes Kohl’s fell almost 8.5%, and in the morning after the close – 11% lower. The department store chain had reported a significant decline in first-quarter earnings before the bell and cut its full-year earnings and sales guidance. CEO Michelle Gass cited “macro headwinds from last year’s lack of stimulus and an inflationary consumer environment.” Kohl’s said on Thursday that final and fully funded bids from potential buyers are expected in the coming weeks as the retailer faces increased pressure from activists to sell.
3. Cisco stock falls as tech giant sees unexpected earnings decline
A man walks under the Cisco logo at the Mobile World Congress in Barcelona, Spain on February 25, 2019.
Sergio Perez | Reuters
Pressure on stock futures on Thursday morning, Dow shares Shares of Cisco Systems fell 11% in premarket trading after the network equipment and software maker missed quarterly earnings and lowered its full-year guidance. Cisco sales have been hit by the Covid lockdown in China as well as Russia’s war in Ukraine. The company posted higher-than-expected earnings after the close of trading on Wednesday. Despite large revenue losses and lower volumes, Cisco’s pricing and spending strategies resulted in higher-than-expected margins.
4. The Fed gets one last look at the labor market, with jobless claims before the bell
When investors ran away from stocks, they looked for the perceived security of bonds that pushed the price of 10-year Treasury bonds higher and yields lower on Thursday. Bond prices and yields move in the opposite direction. Benchmark 10-year bond yields fell below 3% after breaking that level again a day earlier.
- The Federal Reserve took a look at the second pillar of its dual mandate of promoting price stability and maximum employment before the call. Weekly initial jobless claims rose to 218,000, more than expected. After hitting a more than 50-year low earlier this spring, first-time jobless claims are gradually rising.
- The May Federal Reserve Bank of Philadelphia manufacturing index showed much lower-than-expected growth, hitting its lowest level in two years.
5. Gas station prices hit new highs, above $4 a gallon in every state.
A woman rides her electric bike past a gas station as current gasoline prices continue to rise, approaching record territory in Encinitas, Calif., on May 9, 2022.
Mike Blake | Reuters
Markets are falling on fears that the Fed-sanctioned slowdown in the economy by raising interest rates and shrinking the balance sheet will not be able to curb inflation. One area where inflation is most evident is at the gas station.
- The national average for a gallon of gasoline hit a new high of nearly $4.59. according to AAA. In every state, the price is over $4 a gallon, and in California it’s over $6.
- Yardeni Research shows that households spend the equivalent of $5,000 a year on gasoline, up 78% from a year ago. The reason for the surge in gas prices is higher oil prices due to disruptions due to Russia’s war in Ukraine.
— CNBC Hanna Miao, Sara Min, Jessie Pound, Lauren Thomas, Jordan Novet, Jeff Marks, Jeff Cox and Patti Domm contributed to this report.
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