Here are the most important news, trends and analysis that investors need to start their trading day:
Traders on the floor of the NYSE, May 16, 2022.
U.S. stock futures rallied Tuesday, with the S&P 500 and the Nasdaq set to open up roughly 1.5% and nearly 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% premarket decline in Dow component Walmart after mixed quarterly results due to rising costs.
- A different story at Home Depot, which weathered inflation. The Dow stock rose 3.5% in the premarket after stronger quarterly results.
- United Airlines rose 4% in Tuesday’s premarket, the morning after raising its current quarter revenue forecast, expecting its busiest summer since before the Covid pandemic began.
- In a choppy session Monday, following multiweek losing streaks, the Dow rose slightly and the S&P 500 fell slightly. The Nasdaq lost 1.2%.
The 30-year Treasury yield ticked higher Tuesday to around 2.95% after the government’s before-the-bell release showed a slightly less-than-expected increase of 0.9% in April retail sales month over month. On a year over year basis, retail sales rose 8.2%. The March numbers were revised sharply higher. Investors are hoping to learn from all the retail numbers how consumer are reacting to rampant price pressures — and in turn, whether the Federal Reserve might need to dial up interest rate hikes to fight inflation.
Workers move shopping carts outside a Walmart store in Lakewood, California, US, 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 nation’s largest grocer and retailer felt pressure from rising costs of food and fuel. Revenue for the quarter beat estimates. That mixed picture carried over to Walmart’s guidance, raising its outlook for sales this year but lowering profit expectations. Chief Financial Officer Brett Biggs told CNBC that Walmart employees returning from Covid leave more quickly than expected caused the company to become overstaffed.
A Home Depot store in Livermore, California, US, on Thursday, May 12, 2022. Home Depot Inc. is scheduled to release earnings figures on May 17. Photographer:
David Paul Morris | Bloomberg | Getty Images
Despite spiking inflation, consumers were still willing to spend money on their homes, and Home Depot does not expect the trend to reverse. The company on Tuesday reported better-than-expected earnings and revenue for the first quarter. Home Depot raised its full-year outlook, now expecting sales to increase about 3% and earnings per share growth in the mid single digits on a percentage basis. The Q1 results mark new CEO Ted Decker’s first quarter at the helm.
Elon Musk, during an event at SpaceX headquarters in Hawthorne, California, U.S., on Thursday, Oct. 10, 2019.
Elon Musk said his $44 billion purchase of Twitter will not move ahead until he has more clarity on how many accounts are fake. Twitter estimated in a filing earlier this month that number was at fewer than 5% in the first quarter. But Musk, CEO of Tesla and SpaceX, estimates bots at around 20% and fears that could be higher. Twitter shares dropped 1% in Tuesday’s premarket. The stock erased all the gains made since Musk disclosed his investment in the social network on April 4, and it’s nowhere near his takeover offer of $54.20 per share.
Warren Buffett at press conference during the Berkshire Hathaway Shareholders Meeting, April 30, 2022.