5 things to know before the stock market opens on Tuesday, August 16

Traders work on the floor of the New York Stock Exchange (NYSE), August 15, 2022.

Brendan McDermid | Reuters

Here are the most important news investors need to start their trading day:

1. Soft morning for stocks

US stock markets appeared to be heading a lukewarm opening Tuesday morning after all three major indices rose on Monday. The Dow Jones Industrial Average, in fact, finished above its 200-day moving average for the first time since April. Investors also got their first taste of big retail gains on Tuesday, as Home Depot and Walmart reported their most recent quarterly results (see below). Stocks have had a strong summer overall after a brutal first half of the year, leading some market watchers to suggest a new bull market is starting. Although not so fast. Markets could have a bumpy September, writes CNBC’s Patti Domm.

2. Walmart keeps its perspective

Philip Radwanski | Light Rocket | fake images

The retail giant posted healthy earnings and revenue beats on Tuesday morning, while keeping his forecast for the second half. The above disclosures set the stage for the results. Last month, Walmart warned that its profits would shrink as customers, dogged by soaring inflation, sought out bargains on lower-margin items like groceries while avoiding more profitable discretionary items like electronics. The retailer, like others in the space, has also had to work with excess inventory as shoppers changed their behaviors. Earnings aren’t the only big news for walmart this week. On Monday, the retailer announced a deal to offer streaming service Paramount+, home of “Paw Patrol” and “Star Trek: Strange New Worlds,” to Walmart+ subscribers.

3. Home Depot Reports

A Home Depot location in Encinitas, California.

mike-blake | Reuters

home improvement retailer exceeded Wall Street expectations on the top and bottom lines. The company also maintained its outlook for the year, even as Americans grapple with high inflation. house deposit sales reflect the strength of high-end consumers who hire professional contractors. “Our performance reflects continued strength in demand for home improvement projects,” Home Depot CEO Ted Decker said in a statement accompanying the earnings release. All was not rosy, however: The company said total customer transactions fell to 467.4 million from 481.7 million in the year-earlier quarter. Rival home improvement retailer Lowe’swhich caters more to the DIY crowd and could offer a clearer picture of the general consumer, reports earnings on Wednesday morning.

4. ‘A housing recession’

The housing market continues to take strange turns. Homebuilder sentiment fell into negative territory this month, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Apart from a brief moment in the early days of the covid pandemicIt’s the first time that’s happened since 2014, reports CNBC’s Diana Olick. “Tighter monetary policy from the Federal Reserve and persistently high construction costs have fueled a housing recession,” said Robert Dietz, chief economist at the NAHB. Mortgage rates have eased from recent highs but are still almost double what they were at the beginning of the year. Home prices also continue to rise and supply remains tight.

5. Studios turn to older movies to pad receipts

Tom Holland is Spider-Man in the Sony-Marvel movie “Spider-Man: No Way Home.”

Sony

“Top Gun: Maverick” can’t keep printing money forever. We are officially in the doldrums the summer box office season. August and September are traditionally pretty weak months for big new releases, but this year is especially soft as studios, disrupted by the Covid pandemic, just don’t have as much product to put out. So two of the biggest players, Disney and Sony, are turning to some old favorites for the juice business. Sony’s “Spider-Man: No Way Home,” which has already grossed more than $1.8 billion worldwide, returns in September. Meanwhile, Disney is promoting two big releases with a couple of re-releases. Ahead of its Disney+ series “Andor,” the studio is releasing 2016’s “Rogue One: A Star Wars Story,” and is re-releasing 2009’s “Avatar” to garner interest in the long-awaited sequel, “Avatar: The Way of Water”, which expires in December.

– CNBC’s Carmen Reinicke, Melissa Repko, Jack Stebbins, Diana Olick and Sarah Whitten contributed to this report.

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