Here are the most important news, trends and analyzes from which investors should start their trading day:
1. Decrease in Nasdaq futures, a day after the technology index sank by more than 2%
Traders based on the NYSE, May 23, 2022
Source: NYSE
U.S. stock futures fell on Wednesday, a day after the Nasdaq fell 2.4 percent as a 43 percent drop in Snap’s profit warning pulled many other technology stocks down. Nasdaq’s bear market on Tuesday was only shy of a 30% drop from its last peak. The S&P 500 withdrew by 0.8%, breaking a winning streak of two sessions, but was still above the bear market level of 20% or more from a previous peak. Dow managed to make a small profit for its third consecutive positive session. But the average value of 30 shares remained in a sharp correction, as determined by a decline of 10% or more from its last high.
2. Investors are looking for security in the bonds before the minutes of the Fed meeting in May
Federal Reserve Chairman Jerome Powell spoke at a news conference after a meeting of the Federal Open Market Committee on May 4, 2022 in Washington, DC. Powell said the Federal Reserve was raising interest rates by half a percentage point to fight record high inflation.
Win Mcnamee | Getty Images
Bond prices have recently been the recipients of the sale of shares. Yields on 10-year government bonds, which are moving back in price, fell to about 2.7% on Wednesday, ahead of the publication of the minutes of the Federal Reserve meeting in May. Investors hope to gain more insight into the central bank’s thinking about inflation and the economy. Earlier this month, the Fed raised interest rates by 50 basis points, twice as much as its increase in March.
3. Rising interest rates on mortgages continue to reduce demand for housing loans
A home for sale sign is pictured in the Alhambra, California on May 4, 2022.
Frederick J. Brown | AFP | Getty Images
Although the 10-year yield recently withdrew from peaks at more than 3% since the end of 2018, it is still more than twice as low as in December, raising mortgage rates and dampening demand for housing loans. Applications for the purchase of housing were equal from week to week and decreased by 16% compared to a year ago. Demand for mortgages from home buyers is now close to the lowest level last seen in the spring of 2020, at the start of the Covid pandemic shortly before frantic demand pushed prices up at an astonishing rate over the past two years. Last week, home loan refinancing applications fell 2% to 75% from a week ago.
4. Dick falls, Nordstrom rises after many different quarters, prospects
Cars parked in front of Dick’s sporting goods store on the Monroe Marketplace in Pennsylvania can be seen.
Paul Weaver SOPA images LightRocket | Getty Images
Shares of Dick’s Sporting Goods sank more than 11% on the preliminary market on Wednesday, shortly after lowering its financial forecast for the full fiscal year, citing incredible inflation and ongoing challenges in the supply chain. Dick’s decision to reduce its guidelines comes after similar adjustments by Walmart, Target and Kohl’s. The sporting goods chain has indeed exceeded expectations for quarterly profits and revenue, as buyers have spent money on golf clubs, football equipment and sportswear.
The buyer leaves the Nordstrom store on May 26, 2021 in Chicago, Illinois.
Scott Olson Getty Images
Unlike inflation-related problems with other retailers, Nordstrom gained nearly 6% in pre-market trade, albeit outside of overnight highs. The high-end department store chain boosted its annual sales and profit forecast after the bell closed on Tuesday. Although reporting slightly higher than expected losses for its first fiscal quarter, Nordstrom saw a 18.7% jump in sales and exceeded pre-pandemic levels as buyers sought to refresh their wardrobes with designer brands and footwear.
5. Wendy’s largest shareholder is pushing for a deal for the fast food chain
The Wendy’s logo will be displayed in Plano, Texas on July 2, 2020.
Dan Tian Xinhua via Getty Images
Shares of Wendy rose about 9% in premarkets after it became known late Tuesday that the largest shareholder in the fast food chain, Trian Partners, is exploring a potential deal for the company. Trian, founded and managed by Nelson Peltz, first invested in Wendy’s in 2005. The hedge fund currently holds a 19.4% stake in Wendy’s. Trian has three seats on the fast food company, including one of Pelz’s chairman. Trian said she had previously called on Wendy’s to cut restaurant costs, improve operations and build its brand.
– Peter Shacknow of CNBC, Diana Olic, Lauren Thomas and Sarah Salinas contributed to this report.
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