The following news items are the most crucial for investors to know as they begin their trading day:
Rising stock futures
Wednesday morning’s market opening was expected to be bullish ahead of two important reports: the consumer price index and Disney profits (more on both below). After all three major indices closed lower on Tuesday, investors are looking for a recovery. Additionally, two Fed officials are scheduled to speak on Wednesday, and both of them could offer additional hints about how the central bank is considering inflation and potential rate increases. Charles Evans, president of the Federal Reserve Bank of Chicago, is scheduled to speak at 11:00 am ET in Des Moines, while Neel Kashkari, president of the Minneapolis Federal Reserve, will speak later on during a panel discussion on stagflation at the Aspen Economic Strategy Group.
Has inflation slowed down?
Possibly. If it is, the recent drop in petrol costs is largely to blame. At 8:30 a.m. ET, when the Bureau of Labor Statistics releases its consumer price index report for July, we’ll know for sure. According to economists surveyed by Dow Jones, the CPI is forecast to rise by 0.2% instead of 1.3% as it did in June. Compared to the 9.1% yearly increase in June, the predicted gain over the previous year will be 8.7%. That’s still high, and the Fed is still on course to raise rates significantly again at its September meeting after two consecutive increases of 3/4 of a point.
Times are tough for Sweetgreen
The once-popular salad chain Sweetgreen has declined significantly since its IPO in November, when its share price reached over $56. It was trading just under $17 as of Tuesday’s closing, and following the company’s dismal earnings announcement, it is now expected to fall much worse on Wednesday. On Tuesday, Sweetgreen announced it will be reducing its employees by 5% and shifting its offices to a more compact structure. In after-hours trading, shares fell more than 20% as a result of the report, which exposed the company’s developing troubles. It reduced its same-store sales growth forecasts from its prior expectation of 20% to 26% growth to between 13% and 19%. “We think that it’s a conservative estimate, but looking back, we’ve just been wrong on so many of these calls,” Mitch Reback, CFO, stated on a conference call.
Musk sells additional shares of Tesla
The richest man in the world recently acquired some fresh capital. Following months in which he sold more than $8 billion in Tesla shares, Elon Musk sold over $6.9 billion in the company’s equity between Friday and Tuesday, according to regulatory records. He stated he had no more share sales planned at the moment, in April. However, he has since engaged Twitter in a legal battle over his decision to back out of his $44 billion offer to acquire the social network. To compel him to finish the agreement, Twitter is suing. Tuesday night, Musk was asked on Twitter if he had finished selling shares for the time being. He said, “Yes,” and continued, “In the (hopefully unlikely) event that Twitter forces this deal to close and some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock.”
Disney on the scene
This earnings season, the focus is on the Mouse House. Investors will analyze the entertainment company’s financials, but they’ll also be closely watching the amount of streaming subscribers. Disney’s ability to reach between 230 million and 260 million subscribers by the end of 2024 will almost certainly determine whether CEO Bob Chapek keeps his job. FactSet estimates that experts anticipate the company to post approximately 10 million adds in the prior quarter, bringing its overall count to approximately 147 million. According to Alex Sherman of CNBC, the real number might mark a turning point in how the rest of the media industry views the state of streaming. The release of the Disney analysis coincides with a significant overhaul of Netflix’s economic strategy, which includes the introduction of advertising. Netflix has long been the market leader. Additionally, HBO Max is being updated by Warner Bros. Discovery.