Traders work on the floor of the New York Stock Exchange (NYSE) in New York, August 8, 2022.
andrew kelly | Reuters
Here are the most important information investors need to start their trading day:
1. Stock futures are rising
Markets were expected to open in positive territory on Wednesday morning ahead of two key reports: the Consumer Price Index and Disney earnings (more on the two below). Investors are hoping for a rebound after all three major indexes closed lower on Tuesday. There are also a few Fed officials on the agenda Wednesday, both of whom could provide more clues as to how the central bank views inflation and future rate hikes. Chicago Federal Reserve Chairman Charles Evans is scheduled to speak at 11:00 a.m. ET in Des Moines, while Minneapolis Fed Chairman Neel Kashkari will speak later during a panel on stagflation at the Aspen Economic Strategy Group.
2. Inflation cools slightly
Gas prices are displayed at an Exxon gas station on July 29, 2022 in Houston, Texas.
Brandon Bell | Getty Images
The inflation rate slowed last month as gasoline prices fell. The consumer price index rose at an annual rate of 8.5%, according to the Bureau of Labor Statistics. Economists polled by Dow Jones had expected the year-over-year figure to show 8.7% growth, down from a 9.1% annual increase in June. On a month-to-month basis, the CPI did not change at all, while economists had forecast growth of 0.2%. Despite the rate slowing, inflation is still high and the Fed is still on track for another rate hike at its September meeting after consecutive three-quarter point increases.
3. Musk sells more Tesla shares
“The past two years have been an absolute nightmare of supply chain disruptions, one thing after another, and we’re not out of it yet,” said Tesla CEO Elon Musk.
Patrick T. Fallon | Reuters
The richest person in the world just secured new funding. Elon Musk sold nearly $6.9 billion worth of Tesla stock between Friday and Tuesday, according to regulatory disclosures, months after selling more than $8 billion of the company’s stock. At the time, in April, he said he did not expect any further stock sales. Since then, however, he has been embroiled in a legal battle with Twitter over his decision to walk away from his $44 billion deal to buy the social network. Twitter is suing him to force him to close the deal. Musk was asked on Twitter Tuesday night if he’s done selling stocks yet. He said “yes” and then added, “In the (hopefully unlikely) event that Twitter forces this deal *and* certain financial partners don’t materialize, it’s important to avoid a sale of Urgency of Tesla’s Actions.”
4. Disney On Deck
Disney CEO Bob Chapek at the Boston College Chief Executives Club on November 15, 2021.
Charles Krupa | PA
It’s Mouse House’s turn to take center stage this earnings season. As investors digest the entertainment giant’s finances, they’ll also be paying close attention to its streaming subscriber count. CEO Bob Chapek has all but bet his job on whether Disney can reach between 230 million and 260 million subscribers by the end of 2024. According to FactSet, analysts expect the company to report around 10 million additions in the previous quarter, which would bring its total count to around 147 million. Where the actual number lands could define how the rest of the media industry interprets the health of streaming, and it could be a turning point, writes CNBC’s Alex Sherman. The Disney report comes as long-time leader Netflix undergoes a serious overhaul of its business model, including the addition of advertising. Warner Bros. Discovery is also reworking its HBO Max service.
5. Times are tough for Sweetgreen
A Sweetgreen banner on the NYSE, November 18, 2021.
Sweetgreen, the once-bustling salad chain, has fallen sharply since its IPO in November, when it hit more than $56 per share. As of Tuesday’s close, it was trading below $17 – and is now on course to fall further on Wednesday after the company’s disastrous earnings report. Sweetgreen announced on Tuesday that it would lay off 5% of its workforce while moving its offices to a smaller building. Shares fell more than 20% in after-hours trading after the report, exposing the company’s growing pains. It lowered its projection for same-store sales growth to between 13% and 19%, from its previous forecast for growth of 20% to 26%. “We think that’s a conservative estimate, but in hindsight we were wrong on so many of those calls,” chief financial officer Mitch Reback said on a conference call.
– CNBC’s Carmen Reinicke, Patti Domm, Lora Kolodny, Alex Sherman and Amelia Lucas contributed to this report.
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