Traders on the floor of the NYSE, August 11, 2022.
Here are the most important information investors need to start their trading day:
1. Bad start for equities
Stock futures fell Monday morning, signaling a soft start to a crucial week for investors looking for clues about the state of the economy. All three major US indices closed higher last week. For the S&P 500, it was the fourth consecutive winning week. On Monday, however, markets were faced with poor economic news from China (more below) while anticipating retail earnings reports (more below as well). There was some good news for consumers, however, as crude oil prices fell following weak Chinese data, a sign that gasoline prices will fall further.
2. Big week for retail revenue
Signage at a Walmart store in Secaucus, New Jersey.
lucas jackson | Reuters
It’s the retailers’ turn to be in the spotlight. On Tuesday, Walmart, which made waves by slashing its forecast and cutting corporate jobs earlier this summer, will give investors a glimpse of the scale of inflation and overstocked inventory that’s squeezing margins. Target, which is deep in its own inventory reduction plan, reported Wednesday. Home improvement retailers Home Depot and Lowe’s report on Tuesday and Wednesday, respectively. Then finally, on Thursday, Kohl’s is about to report. Investors will be looking for clues about the department store chain’s strategy after its deal with Franchise Group fell through in late June.
3. Slow growth in China
Employees working on an air conditioner production line at a Midea factory in Guangzhou, China.
Jade Gao | AFP | Getty Images
Several weak economic data points out of China weighed on stocks on Monday morning. The government reported industrial production and retail sales growth below analysts’ expectations. Investment in the manufacturing sector slowed, while the decline in real estate investment accelerated. China’s economy has struggled to ignore the impact of tough Covid restrictions, while its real estate sector is suffering from reduced cash flow as many homebuyers stopped making mortgage payments in protest house construction delays.
4. Peloton makes cuts in search of growth
In case you missed it on Friday, pandemic darling Peloton unveiled several drastic measures as it looks for ways to make a profit as people return to gyms and the great outdoors to exercise. The connected fitness company said it would cut 780 jobs, close several of its outlets and outsource delivery and other logistics functions to third parties. “We need to get our revenue to stop declining and start growing again,” CEO Barry McCarthy told employees in a memo on Friday. “Money is oxygen. Oxygen is life.” Shares of Peloton were down ahead of Monday’s market open.
Scott Keogh of Volkswagen of America at the VW plant in Chattanooga, TN on June 8, 2022.
Michael Wayland | CNBC
As automakers’ plans to build and sell electric vehicles expand, so do their investments in the southern United States. Since 2017, automakers have invested billions more in southern states than those in the Great Lakes region, home to Detroit, aka the Motor City. There are several reasons why executives are attracted to the South, including lower costs, as well as tax breaks and a non-union workforce. But automakers are also struggling. Read the in-depth dispatch from CNBC Autos reporter Michael Wayland of Tennessee.
– CNBC’s Tanaya Macheel, Evelyn Cheng, Pippa Stevens, Lauren Thomas and Michael Wayland contributed to this report.
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