Here are the key news, trends and analyzes that investors need to start their trading day:
Stock futures fall as inflation claims another trader
Traders on the floor of the NYSE, May 17, 2022.
US stock futures fell on Wednesday as rising inflation hit another trader. Target fell 24% in the advance market, shortly after a large loss of earnings. A similar results picture at Walmart was revealed on Tuesday. The Dow closed almost 1[ads1]1.4% in its worst one-session decline since 1987. Walmart shares lost another 1.7% in Wednesday’s advance market. One of the drivers behind rising inflation is energy costs. The US oil price rose by 2.5% on Wednesday, reaching 115 dollars per barrel again.
Despite Walmart’s problems, the Dow Jones Industrial Average rose 431 points or 1.3% on Tuesday. The S&P 500 and Nasdaq rose 2% and almost 2.8% respectively in Wall Street’s latest attempt at improvement after weeks of heavy losses. The Nasdaq was still in a bear market as defined by a fall of 20% or more from its previous high. The Dow and S&P 500 were still in corrections, defined by a decline of 10% or more from previous highs.
2. The target is the one who is thrown on Wednesday on a major earnings miss
Employees assist cashiers at a supermarket on May 11, 2022 in New York City.
Liao Pan | China News Service | Getty pictures
Target’s stock dip in the pre-market came after the trader on Wednesday morning reported adjusted first-quarter earnings that fell well below estimates. The company’s profits were hampered by expensive shipping costs, higher discounts and lower than expected sales of discretionary goods from TVs to bicycles. Like Walmart on Tuesday, which also quoted inflation and higher stock pressure, Target’s earnings exceeded estimates. Target reiterated its sales forecast, which indicates medium single-digit growth on a percentage basis this year and beyond.
3. Lowe’s is also under pressure after weaker-than-expected sales
Pallets of garden equipment are stacked in the parking lot of a Lowe’s store in San Bruno, California.
David Paul Morris | Bloomberg | Getty pictures
In contrast to Home Depot’s strong quarter and guidance a day earlier, rival Lowe’s on Wednesday morning delivered a turnover in the first quarter that exceeded expectations. Lowe’s shares fell 4% in the advance market. The company saw cooler spring weather hurting demand for supplies for outdoor do-it-yourself projects. Home Depot held its own when professional sales surpassed DIY. Lowe’s, which receives around 75% to 80% of total sales from do-it-yourself customers, hit earnings. The company reiterated its full-year sales prospects between $ 97 billion and $ 99 billion.
4. Lowers housing data as Fed chief Powell talks hard about prices
Timber on site for a house under construction in Cielo at Sand Creek by Century Communities housing development in Antioch, California, USA, Thursday, March 31, 2022.
David Paul Morris | Bloomberg | Getty pictures
The government’s commissioning and building permit report from April showed a decline in construction activity. The start-up of housing last month came in with a seasonally adjusted annual rate of 1.72 million. It was below the estimates. Building permits in April were in line with expectations of an annual rate of 1.82 million.
- The weekly demand for mortgages from home buyers falls by 12%, as higher interest rates took their toll. It was the first weekly decline in about a month. Inflation also does not help consumers feel particularly flush. Refinancing applications continued to decline, down 10% for the week.
According to the data, the 10-year government interest rate rose on Wednesday, just around 3%. The continued strength of the benchmark interest rate can be attributed to comments from Governor Jerome Powell. In a Wall Street Journal interview on Tuesday, Powell said the central bank will not hesitate to continue raising interest rates until inflation falls.
5. JPMorgan investors send CEO Jamie Dimon a payroll announcement
JP Morgan Chief Jamie Dimon speaks at lunch at Boston College Chief Executives Club in Boston, Massachusetts, USA, November 23, 2021.
Brian Snyder | Reuters
JPMorgan Chase’s Jamie Dimon was given a rare reprimand late Tuesday when shareholders expressed their disapproval of his $ 52.6 million retention bonus. Only 31% of investors who attended JPMorgan’s annual shareholders’ meeting supported the award, which was part of the chairman’s and CEO’s compensation package for 2021 and designed to keep him at the helm for another five years. While the vote was non-binding, JPMorgan’s board said they take investor feedback “seriously” and believed Dimon’s bonus should be a one-time event.
– CNBC Sarah Min, Pippa Stevens, Melissa Repko and Hugh Son contributed to this report.
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