5 Things to Know Before the Stock Market Opens on Wednesday, May 18
Here are the most important news, trends and analysis that investors need to start their trading day:
1. Stock futures fall as inflation calls for another retailer
Traders on the NYSE floor, May 17, 2022
Source: New York Stock Exchange.
Despite Walmart’s troubles, the Dow Jones Industrial Average rose 431 points, or 1.3%, on Tuesday. The S&P 500 and Nasdaq gained 2% and almost 2.8%, respectively, in Wall Street’s latest attempt to recover from weeks of sharp losses. The Nasdaq was still in a bear market, as evidenced by a 20% or more drop from its previous high. The Dow and S&P 500 were still in a correction, defined by a 10% or more drop from previous highs.
2. The target is the one who got busted on Wednesday due to a big miss in earnings.
Employees help shoppers at a supermarket checkout on May 11, 2022 in New York City.
Liao Pan | China News Service | Getty Images
The drop in shares of Target in premarket came after the retailer posted adjusted first-quarter earnings on Wednesday morning, which far behind the scores. The company’s profits were hampered by high transportation costs, higher discounts and lower-than-expected sales of essentials, from televisions to bicycles. Like Walmart on Tuesday, which also cited inflation and higher inventory pressure, Target’s revenue topped estimates. Target reaffirmed its sales guidance, which calls for mid-single-digit percentage growth this year and beyond.
3. Lowe’s is also under pressure due to weaker-than-expected sales.
Pallets of garden supplies are stacked in the parking lot of a Lowe’s store in San Bruno, California.
David Paul Morris | Bloomberg | Getty Images
4. Housing market data is expected to slow as Fed chief Powell speaks tough on rates.
Lumber at the site of a house under construction at Cielo at Sand Creek by the Century Communities housing estate in Antioch, California, USA on Thursday, March 31, 2022.
David Paul Morris | Bloomberg | Getty Images
- Weekly mortgage demand by homebuyers is down 12% as higher rates take a toll. It was the first weekly drop in about a month. Inflation also doesn’t help consumers feel particularly good. Applications for refinancing continued to decline, dropping by 10% over the week.
The 10-year Treasury yield rose about 3% on Wednesday. The strength of benchmark returns may be related to the comments of Federal Reserve Chairman Jerome Powell. In an interview with the Wall Street Journal on Tuesday, Powell said the central bank would not hesitate to continue raising interest rates until inflation eased.
5. JPMorgan investors send CEO Jamie Dimon a payout message
JP Morgan CEO Jamie Dimon speaks at the Boston College Leaders Club Luncheon in Boston, Massachusetts, USA on November 23, 2021.
Brian Snyder | Reuters
— CNBC Sara Min, pippa stevens, Melissa Repko and Hugh Son contributed to this report.
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