Here are the most important news items that investors need to start their trading day:
Stock futures fell Monday morning, indicating a soft opening to a crucial week for investors seeking clues about the state of the economy. All three major U.S. indices closed higher last week. For the S&P 500, it was the fourth winning week in a row. On Monday, though, markets were contending with bad economic news out of China (more on that below) while looking ahead to bellwether retail earnings reports (more on that below, too). There was some good news for consumers, though, as crude oil prices slipped following the weak China data, a sign that gas prices are going to come down even more.
It’s retailers’ turn in the earnings spotlight. On Tuesday, Walmart, which made waves by slashing its forecast and cutting corporate jobs earlier this summer, will give investors a look at just how much inflation and overstocked inventories are cutting into margins. Target, which is deep into an inventory-reduction plan of its own, reports Wednesday. Home improvement retailers Home Depot and Lowe’s report Tuesday and Wednesday, respectively. Then finally, on Thursday, Kohl’s is set to report. Investors will be looking for clues about the department store chain’s strategy after its deal with Franchise Group fell apart at the end of June.
Several soft economic data points from China weighed on stocks Monday morning. The government reported industrial production and retail sales growth that fell below analysts’ expectations. Investment in manufacturing slowed down, while a decline in real estate investment accelerated. The Chinese economy has struggled to shrug off the impact of strict Covid restrictions, while its real estate sector is suffering from reduced cash flow as many homebuyers have stopped making mortgage payments to protest homebuilding delays.
In case you missed it Friday, pandemic darling Peloton unveiled several drastic measures as it seeks ways to turn a profit as people head back to gyms and the great outdoors to exercise. The connected fitness company said it would cut 780 jobs, close several of its retail locations and farm out delivery and other logistics functions to third parties. “We have to make our revenues stop shrinking and start growing again,” CEO Barry McCarthy told employees in a memo Friday. “Cash is oxygen. Oxygen is life.” Shares of Peloton were down before the market opened Monday.
As automakers’ plans to build and sell electric vehicles grow, so do their investments in the American South. Since 2017, car companies have invested billions more in Southern states than those in the Great Lakes region, which is home to Detroit, i.e., the Motor City. There are several reasons executives are attracted to the South, including lower costs, as well as tax breaks and non-union labor. But auto companies are running into some difficulties, too. Read CNBC autos reporter Michael Wayland’s deep-dive dispatch from Tennessee.
— CNBC’s Tanaya Macheel, Evelyn Cheng, Pippa Stevens, Lauren Thomas and Michael Wayland contributed to this report.