Stock futures plunge ahead of big week for retail sector
US Stock Futures are down heading into the current trading week. This follows another turbulent week for the broader stock market. Values like these mark the sixth consecutive week of losses for US equities. As investors continue to be on the defensive, the retail sector will be front and center this week on the earnings front. This is evident as the likes of walmart (NYSE: WMT) and Target (NYSE:TGT) will release earnings later this week.
Additionally, investors will also be waiting for April retail sales from the Commerce Department. As it stands, consensus data from Bloomberg indicates that retail sales could rise 1.0% in April. This would be an improvement from the 0.5% of the previous month. Explaining this in more detail, analysts from Bank of America (NYSE: BAC) (BofA). The firm writes:There was a sharp sequential contraction in gas spending as prices stabilized from record highs in March, which weighed on the headline and non-auto metrics.BofA analysts also add: “Excluding autos, gas, building materials and restaurants, core control sales should jump solidly, suggesting continued strength in spending on goods.”
Despite the overall pressure on equities right now, it looks like investors will have another busy week ahead in the stock market. As of 6:32 a.m. ET, Dow, S&P 500 and Nasdaq futures are trading down 0.14%, 0.37% and 0.61% respectively.
Goldman Sachs chief economist Jan Hatzius on consumer spending trends
A recent research note from Goldman Sachs’ (NYSE: GS) Chief Economist, Jan Hatzius is currently making the rounds. This is believed to be partly due to Hatzius’ comments on the current state of consumer spending trends. The economist notes that high inflation combined with rising interest rates will likely start to weigh on consumer spending. According to Hatzius,Alternative data points to a slowdown in consumer spending in late April and early May, possibly in response to tighter financial conditions and higher consumer prices.”
At the same time, the Goldman economist also refers to the University of Michigan’s measure of US consumer confidence. In early May, US consumer confidence fell to 59.1, a 28% year-over-year decline. That would mark an 11-year low for the metric. Because of all of this, Hatzius and his team seem to be in shock over their expectations on this front. For starters, the company cut its second-quarter GDP estimate to a 2.5% increase from a previous outlook of 2.9%. In his closing notes, Hatzius states:$2.5 trillion in excess savings, strong job gains and continued wage growth represent continued tailwinds for consumption growth.However, he adds, “we assume a deceleration in services spending in May and June and an outright decline in retail spending in May.”
With all of this in mind, investors might reconsider their strategy at the start of the current trading week. After all, even as some of the biggest names in the retail space report earnings, macro factors continue to weigh on markets.
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XPO Logistics plans to sell its Freight Forwarding division
XPO logistics (NYSE: XPO) could be among the key names that will turn heads when the market opens this week. Essentially, this could be the result of a recent Bloomberg report on XPO. In detail, the report suggests that XPO is considering selling its transit unit. If so, it would mark another key divestment for the company in its journey to streamline operations. Additionally, the report also values the unit between $400 million and $600 million. On the one hand, it wouldn’t be so surprising to leave XPO. This year alone, the company has already sold its intermodal business and launched a spin-off of its brokerage transportation services.
In the words of CEO Brad Jacobs, these divestments “simplifies our business model and brings our capital structure closer to investment grade.“Also, this all comes at a time when XPO seems to be running full steam ahead. Just last week, the company reported record quarterly revenue of $3.47 billion in its latest financial release. According to the report, XPO’s earnings per share for the quarter were $1.25. For comparison, the consensus figure on Wall Street was $0.93. Additionally, XPO is also raising its financial outlook for the full year as a result of all this. As the company continues to strengthen, XPO stock could be in the spotlight now.
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Ford dumps more Rivian shares after IPO expires
In other news, Ford (NYSE:F) continues to lose its current position in the electric vehicle (EV) startup Rivian Automotive (NASDAQ: RIVN). According to an SEC filing, Ford sold an additional 7 million shares of Rivian last Friday. The shares were sold at an average price per share of $26.88, for a total of $188 million. Arguably, that would put Rivian on the spot, as Ford just sold 8 million shares earlier in the week. Not to mention that another anonymous investor also reportedly planned to dump 13-15 million shares of RIVN, according to CNBC. Namely, Ford’s move comes just as the lock-up period for Rivian’s stock IPO has expired.
As a result of all this, Ford currently owns 87 million Rivian shares. Additionally, Rivian continues to face issues regarding its R1T electric pickup trucks. According to a report from the wall street journal, Rivian is recalling 502 of its R1T trucks from 2022. The reason for its first vehicle recall is believed to be due to issues with the airbag system. According to Rivian, theThe occupant classification system may not deactivate the airbag when a child or child restraint is in the front passenger seat.“As Rivian tries to come to terms with its current situation, the RIVN stock would be in the headlines this week.
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Today’s stock market results
For today’s pre-market earnings, we have Wix (NASDAQ: WIX), semiconductor tower (NASDAQ: TSEM), and monday.com (NASDAQ: MNDY), on deck. Also, the tastes of Weber (NYSE: WEBR), and Warby Parker (NYSE: WRBY) are also providing financial updates at this time. Alternatively, there are also several notable names that report earnings within hours of marketing. This includes take two (NASDAQ: TTWO), Sundial producers (NASDAQ: SNDL), peak energy (NASDAQ: HPK), Naked (NYSE: NU), and Stratasys (NASDAQ: SSYS). From economic data and company activity to earnings, there’s plenty of stock market news to take in today.
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