5 Things You Should Know Before the Stock Market Opens on Wednesday, March 18th

Here are the top news, trends and analysis investors need to start their trading day:

1. Stock futures fall as inflation claims another retailer

Traders on the NYSE floor, May 17, 2022.

Source: New York SE

US stock futures fell on Wednesday as rising inflation hit another retailer. Target is down more than 20% in the premarket, shortly after a big profit drop. A similar earnings picture at Walmart was unveiled on Tuesday. Dow stock closed down nearly 11.4% in its worst drop since 1987. Walmart shares lost another 1.5% Wednesday premarket. One of the drivers behind rising inflation is energy costs. US oil prices rose 2.5% on Wednesday, topping $115 a barrel again.

Despite Walmart’s woes, the Dow Jones Industrial Average rose 431 points, or 1.3%, on Tuesday. The S&P 500 and Nasdaq gained 2% and nearly 2.8%, respectively, in Wall Street’s latest attempt to rebound after weeks of sharp losses. The Nasdaq was still in a bear market, defined as a decline of 20% or more from its previous high. The Dow and S&P 500 were still in corrections, defined as falling 10% or more from previous highs.

2. The target is the one slammed for a big win loss on Wednesday

Employees assist customers in the checkout area of ​​a supermarket on May 11, 2022 in New York City.

Liao pan | China news service | Getty Images

Target’s premarket plunge came after the retailer on Wednesday morning reported adjusted first-quarter earnings that fell well short of estimates. The company’s profits were eaten up by expensive freight costs, higher discounts, and lower-than-expected sales of consumer items ranging from televisions to bicycles. Like Walmart on Tuesday, which also cited inflation and higher inventory pressures, Target’s earnings beat estimates. Target reiterated its revenue guidance of mid-single-digit percentage growth for this year and beyond.

3. Lowe’s is also under pressure after weaker than expected sales

Pallets of gardening supplies are stacked in the parking lot of a Lowe’s store in San Bruno, California.

David Paul Morris | Bloomberg | Getty Images

Contrasting with a strong quarter and Home Depot’s guidance the day before, rival Lowe’s delivered first-quarter sales that missed expectations on Wednesday morning. Lowe’s shares are down 2% premarket. The company saw that the cooler spring weather was hurting demand for materials for outdoor do-it-yourself projects. Home Depot held up as professional sales outpaced DIY sales. Lowe’s, which derives about 75% to 80% of its total sales from home improvement customers, has beaten profits. The company reiterated its full-year guidance of sales of between $97 billion and $99 billion.

4. Housing data expected to slow as Fed Chair Powell speaks harshly on rates

Lumber on the site of a home under construction in Cielo at Sand Creek of the Century Communities housing development in Antioch, California, on Thursday, March 31, 2022.

David Paul Morris | Bloomberg | Getty Images

The government’s April Housing Starts and Building Permits report, released at 8:30 am ET, is expected to show a slowdown in construction activity. Economists expect a 2.4% decline to an annual rate of 1.75 million units. Housing starts were up 0.3% in March. Building permits will fall 2.8% to 1.82 million in April. Permits rose 0.4% in March.

  • Weekly mortgage demand from homebuyers plunges 12% as higher interest rates take their toll. It was the first weekly decline in about a month. Inflation isn’t helping consumers feel particularly comfortable either. Funding requests continued their slide, down 10% on the week.

The 10-year Treasury yield rose around 3% on Wednesday. The strength in the benchmark return can be attributed to comments from Federal Reserve Chair Jerome Powell. In an interview with the Wall Street Journal on Tuesday, Powell said the central bank would not hesitate to raise interest rates further until inflation eases.

5. JPMorgan investors message CEO Jamie Dimon about pay

JP Morgan CEO Jamie Dimon speaks at the Boston College Chief Executives Club luncheon in Boston, Massachusetts, the United States, on November 23, 2021.

Brian Snyder | Reuters

JPMorgan Chase’s Jamie Dimon received a rare reprimand late Tuesday as shareholders expressed disapproval of his $52.6 million retention bonus. Just 31% of investors attending JPMorgan’s AGM backed the award, which was part of the Chairman and CEO’s compensation package for 2021 and aimed to keep him at the helm for another five years. While the vote was non-binding, JPMorgan’s board of directors said it takes investor feedback “seriously” and intends Dimon’s bonus to be a one-time event.

— CNBC’s Sarah Min, Pippa Stevens, Melissa Repko and Hugh son contributed to this report.

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https://www.cnbc.com/2022/05/18/5-things-to-know-before-the-stock-market-opens-wednesday-may-18.html 5 Things You Should Know Before the Stock Market Opens on Wednesday, March 18th

Gary B. Graves

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