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 information investors need to start their trading day:

1. Sweet morning for stocks

U.S. stock markets appeared to be heading for a tepid open on Tuesday morning after all three major indexes rose on Monday. In fact, the Dow Jones Industrial Average finished above its 200-day moving average for the first time since April. Investors also got their first taste of big retail profits on Tuesday as Home Depot and Walmart released their latest quarterly results (see below). Stocks had an overall strong summer after a brutal first half, prompting some market watchers to suggest a new bull market is beginning. Not so fast, however. Markets could have a bumpy September, writes CNBC’s Patti Domm.

2. Walmart sticks to its outlook

Filip Radwanski | Light flare | Getty Images

The retail giant posted healthy profits and revenue on Tuesday morning, while meeting its second-half guidance. Earlier disclosures set the stage for the results. Last month, Walmart warned its profits would be squeezed as customers, dogged by skyrocketing inflation, sought bargains on low-margin items such as groceries as they shunned more profitable discretionary items like electronics. The retailer, like others in the space, also faced a glut of 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 bring the Paramount+ streaming service, which hosts “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

The home improvement retailer beat Wall Street expectations on both highs and lows. The company also stuck to its outlook for the year, even as Americans grapple with high inflation. Home Depot sales reflect the strength of high-end consumers hiring 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. However, it wasn’t all rosy: the company said the total number of customer transactions fell to 467.4 million from 481.7 million in the year-ago quarter. Rival home improvement retailer Lowe’s, which caters more to do-it-yourselfers and could offer a clearer picture of the general consumer, announced its results on Wednesday morning.

4. “A real estate 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. Other than a brief moment at the start of the Covid pandemic, this is the first time this has happened since 2014, CNBC’s Diana Olick reports. “Tightening monetary policy from the Federal Reserve and persistently high construction costs have caused a housing slump,” said NAHB chief economist Robert Dietz. Mortgage rates have come down from recent highs, but are still nearly double what they were at the start of the year. House prices also continue to rise and supply remains tight.

5. Studios are turning to older films to fill out 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 of the summer box office season. August and September are traditionally fairly low months for big releases, but this year is particularly sluggish as studios, disrupted by the Covid pandemic, simply don’t have as much product to release. 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 over $1.8 billion worldwide, returns in September. Disney, meanwhile, is promoting two big releases along with a few re-releases. Ahead of its Disney+ series, “Andor,” the studio is releasing 2016’s “Rogue One: A Star Wars Story” and re-releasing 2009’s “Avatar” to tease the long-awaited sequel, “Avatar: The Way of Water.” “, scheduled for December.

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

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