Here are the most important news, trends and analysis that investors need to start their trading day:
1. Nasdaq futures slip, a day after the tech-heavy index fell more than 2%
Traders on the floor of the NYSE, May 23, 2022.
US stock futures fell on Wednesday, a day after the Nasdaq fell 2.4% as Snap’s 43% plunge on a profit warning dragged many other tech stocks lower. The Nasdaq bear market on Tuesday was just short of a 30% decline from its most recent high. The S&P 500 fell 0.8%, snapping a two-game winning streak, but was still above the bear market level by 20% or more from a previous high. The Dow managed a small gain for its third consecutive positive session. But the 30-stock average remained in a sharp correction defined by a decline of 10% or more from its most recent high.
2. Investors seek safety in bonds ahead of May Fed meeting minutes
Federal Reserve Chairman Jerome Powell speaks during a news conference following a meeting of the Federal Open Market Committee on May 04, 2022 in Washington, DC. Powell announced that the Federal Reserve was raising interest rates by half a percentage point to combat record inflation.
Win Mcnamee | Getty Images
Bond prices have recently benefited from the massive sell-off in equities. The 10-year Treasury yield, which moves inversely to price, fell to around 2.7% on Wednesday, ahead of the release in the afternoon of the minutes of the Federal Reserve’s monetary policy meeting. in May. Investors hope to better understand the central bank’s thinking on inflation and the economy. Earlier this month, the Fed raised interest rates by 50 basis points, double its March hike.
3. Persistently high mortgage rates continue to reduce demand for home loans
A sign of a house for sale is pictured in Alhambra, California on May 4, 2022.
Frederic J. Brown | AFP | Getty Images
Even though the 10-year yield has recently retreated from late-2018 highs above 3%, it is still more than double the December low, pushing up mortgage rates and dampening demand for mortgages. Home buying inquiries were flat week over week and down 16% from a year ago. Demand for mortgages from homebuyers is now near lows last seen in the spring of 2020, at the start of the Covid pandemic shortly before frenzied demand drove prices up at a staggering rate over the past few months. last two years. Home loan refinance applications fell 2% last week and were 75% lower than the same week a year ago.
4. Dick’s plunges, Nordstrom rises after wildly different quarters, outlook
Cars are parked outside a Dick’s Sporting Goods store in Monroe Marketplace, Pennsylvania.
Paul Tisserand | SOPA Images | light flare | Getty Images
Shares of Dick’s Sporting Goods fell more than 11% in Wednesday’s premarket, shortly after slashing its full-year financial forecast, citing soaring inflation and ongoing supply chain problems. ‘supply. Dick’s decision to lower its forecast comes after similar adjustments from Walmart, Target and Kohl’s. The sporting goods chain beat expectations for quarterly profit and revenue as shoppers spent money on golf clubs, soccer gear and sportswear.
A customer leaves a Nordstrom store on May 26, 2021 in Chicago, Illinois.
Scott Olson | Getty Images
Unlike inflation-related issues at other retailers, Nordstrom gained nearly 6% in premarket trading, though down overnight. The upscale department store chain after the closing bell on Tuesday raised its forecast for annual sales and profit. While posting a slightly larger-than-expected loss for its fiscal first quarter, Nordstrom saw sales rise 18.7% and surpass pre-pandemic levels as shoppers sought to refresh their closets with brands and designer shoes.
5. Wendy’s biggest shareholder is pushing a deal for the fast food chain
The logo of a Wendy’s restaurant is seen in Plano, Texas on July 2, 2020.
Dan Tian | Xinhua via Getty Images
Wendy’s shares gained nearly 10% in the pre-market after it was announced in a filing on Tuesday night that the fast food chain’s largest shareholder, Trian Partners, was exploring a potential deal for the company. Trian, founded and run by Nelson Peltz, first invested in Wendy’s in 2005. The hedge fund currently owns a 19.4% stake in Wendy’s. Trian holds three seats on the fast food company’s board, including one held by Peltz, the chairman. Trian said it previously urged Wendy’s to reduce restaurant overhead, improve operations and build its brand.
—CNBC Peter Schacknow, Diana Olick, Lawrence Thomas and Sara Salinas contributed to this report.
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