Here are the top news, trends and analysis investors need to start their trading day:
1. The Dow will open slightly lower after 7 straight weeks of selling
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, the United States, May 13, 2022.
Brendan Mcdermid | Reuters
U.S. stock futures fell slightly on Monday after the Dow Jones Industrial Average fell for a seventh straight week, the first time in more than two decades. The S&P 500 and Nasdaq both fell six straight weeks for the first time since 2011 and 2012, respectively.
- Despite Friday’s strong rebound led by the Nasdaq’s 3.8% gain, all three equity benchmarks ended with weekly losses of more than 2%. The Nasdaq remained in a bear market, with the Dow and S&P 500 both undergoing sharp corrections.
- The 10-year Treasury yield was steady on Monday, just under 3%. US oil prices fell but were still around $109 a barrel. Crypto fell again, with Bitcoin hovering around $30,000 early Monday.
- Retail profits start Tuesday and the government releases April retail sales data. Investors are hoping these reports will provide insights into how consumers are responding to rising inflation and whether the Federal Reserve could be persuaded to raise interest rates more aggressively to quell price pressures.
- Former Fed Chairman Ben Bernanke said the current central bank made a mistake waiting to tackle inflation. “One of the reasons was that they didn’t want to shock the market,” he told CNBC’s Andrew Ross Sorkin in an interview televised Monday.
2. JetBlue turns hostile with its Spirit Airlines takeover bid
A JetBlue aircraft lands past a Spirit Airlines jet on the taxiway at Fort Lauderdale Hollywood International Airport on Monday, April 25, 2022. (Joe Cavaretta/Sun Sentinel/Tribune News Service via Getty Images)
Joe Cavaretta | Sun Guardian | Getty Images
JetBlue Airways hostilely accepted its cash offer to buy Spirit Airlines on Monday. In a letter to Spirit shareholders, JetBlue offered $30 per share and said it was willing to go up to $33 if the board committed to negotiating a “consensual transaction.” Spirit’s shares are up nearly 10% in premarket trading to over $18 a share, well below asking prices.
- Earlier this month, Spirit rejected JetBlue’s cash offer of $33 per share, or $3.6 billion, citing regulatory concerns. At the time, Spirit said it was sticking to a deal to merge with fellow ultra-low-cost carrier Frontier Airlines, a $2.9 billion deal struck in February.
3. McDonald’s is selling its Russia business because of Putin’s Ukraine war
A woman walks down a street past a banner offering a job at McDonald’s in the town of Pokrov in the Vladimir region, Russia, March 21, 2022.
Evgenia Novozhenina | Reuters
McDonald’s said Monday it will sell its business in Russia, just over two months after it suspended operations in the country due to its unprovoked invasion of Ukraine. McDonald’s said its “further ownership of the business in Russia is no longer tenable” and that it is not in line with its values.
McDonald’s first opened in Russia 32 years ago. It has more than 800 restaurants and 62,000 employees in Russia. The company said it was looking for a local buyer. McDonald’s announcement on Monday is a clear indication of how much the western world has turned against the regime of Russian President Vladimir Putin.
4. Tesla is said to delay its production ramp-up in Shanghai
A truck exits Tesla Shanghai Gigafactory on April 25, 2021 in Shanghai, China.
Visual China Group | Getty Images
Tesla has delayed a plan to restore production at its Shanghai plant to levels before the city’s Covid lockdown more than six weeks ago by at least a week, citing an internal memo, according to Reuters. Businesses in Shanghai, China’s largest city, will only be allowed to reopen if they can operate under such an arrangement, which requires workers to isolate themselves.
Shanghai is targeting a wide reopening and allowing normal life to resume from June 1, a city official said Monday after saying 15 of its 16 counties had eliminated cases outside of quarantine areas. Dozens of new Covid cases have been discovered in Beijing every day for the past three weeks. The Chinese capital is not under a citywide lockdown but is subject to virus mitigation restrictions.
5. Elon Musk says Twitter’s legal department prosecuted him for a bot tweet
Tesla and SpaceX CEO Elon Musk tweeted Saturday that Twitter’s legal team accused him of violating a non-disclosure agreement by disclosing the sample size used in the social media platform’s checks for automated users. “Twitter’s legal team just called to complain that I violated their NDA by revealing that the bot review sample size is 100,” he wrote.
Musk tweeted Friday that his $44 billion cash deal to privatize the company was “temporarily on hold” while he awaits data on the proportion of his fake accounts. In a second tweet on Friday, he said he was “still committed” to the deal. Shares of Twitter fell more than 2% on Monday after a roller coaster ride on Friday.
— CNBC’s Tanaya Macheel, Abigail Ng, Samantha Subin, Jesse pounds, Leslie Josephs and Mike Calia and Reuters contributed to this report.
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https://www.cnbc.com/2022/05/16/5-things-to-know-before-the-stock-market-opens-monday-may-16.html 5 Things You Should Know Before the Stock Market Opens on Monday, March 16th