Stock Market Futures Dip Ahead Of Major Week For Retail Industry
U.S. stock futures are on the decline heading into the current trading week. This follows another turbulent week for the broader stock market. The likes of which mark the sixth consecutive week of losses for U.S. stocks. While investors continue to go on the defensive, the retail industry will be front and center this week on the earnings front. This is apparent as the likes of Walmart (NYSE: WMT) and Target (NYSE: TGT) will be reporting their earnings later this week.
Furthermore, investors will also be awaiting the April retail sales print from the Commerce Department. As it stands, consensus data from Bloomberg notes that retail sales could rise by 1.0% in April. This would be some improvement over the previous month’s 0.5%. Explaining this in further detail are analysts over at Bank of America (NYSE: BAC) (BofA). The firm writes, “There was a big sequential contraction in gas spending as prices leveled off from record-high levels in March, which weighed down headline and excluding-auto measures.” BofA analysts also add, “Netting out auto, gas, building materials, and restaurants, core control sales should jump by solidly, suggesting continued strength in goods spending.”
Despite the overall pressure on stocks now, it looks like investors will have another busy week ahead in the stock market. As of 6:32 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading lower by 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. Notably, this would be due to Hatzius’ comments on the current state of consumer spending trends. The economist notes that high inflation in combination with rising interest rates will likely begin weighing in on consumer spending. According to Hatzius, “Alternative data indicate a slowdown in consumer spending in late April and early May—perhaps 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 U.S. consumer confidence measure. Back in early May, U.S. consumer confidence fell to 59.1, a 28% year-over-year drop. This would mark an 11-year low for the metric. Because of all this, Hatzius and his team appear to be reeling in their expectations on this front. For starters, the firm is reducing its second-quarter GDP estimates to a 2.5% increase from a previous outlook of 2.9%. In his closing notes, Hatzius posits, “$2.5 trillion of excess savings, solid job gains, and continued wage growth represent continued tailwinds for consumption growth.” However, he adds, “we are assuming a deceleration in services spending in May and June and an outright decline in retail spending in May.”
With all this in mind, investors could be reconsidering their strategy going into the current trading week. After all, even as some of the biggest names in the retail space report earnings, macroeconomic factors continue to hang over markets.
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XPO Logistics Considers Selling Freight Forwarding Division
XPO Logistics (NYSE: XPO) could be among the key names turning heads at this week’s market open. For the most part, this could be the result of a recent report from Bloomberg about XPO. In detail, the report suggests that XPO is considering selling its freight-forwarding unit. Should this be the case it would mark another key divestment for the company in its path to streamline operations. Additionally, the report also values the unit at $400 million to $600 million. For one thing, this would not be all that surprising a move from XPO. Just this year, the company has already sold its Intermodal Business and initiated a spinoff of its brokered transportation services.
In the words of CEO Brad Jacobs, these divestitures “simplifies our business model and moves our capital structure closer to investment-grade.” Also, all this comes at a time when XPO seems to be firing on all cylinders. Just last week, the company reported a record quarterly revenue of $3.47 billion in its latest financial release. According to the report, XPO’s earnings per share for the quarter are $1.25. For comparison, Wall Street’s consensus figure was $0.93. Moreover, XPO is also raising its full-year financial outlook further as a result of all this. As the company continues to go from strength to strength, XPO stock could be in focus now.
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Ford Unloads More Rivian Stock Following IPO Lockup Expiration
In other news, Ford (NYSE: F) continues to shed its current position in electric vehicle (EV) upstart Rivian Automotive (NASDAQ: RIVN). According to an SEC filing, Ford sold an additional 7 million shares of Rivian last Friday. The shares were sold for an average price per share of $26.88, or a total of $188 million. Arguably, this would put Rivian on the spot seeing as Ford just sold 8 million shares earlier in the week. Not to mention, another unnamed investor also reportedly plans to dump 13 million to 15 million of RIVN stock as well, according to CNBC. Namely, Ford’s move comes just as the IPO lockup period for Rivian’s shares expired.
Following all this, Ford currently owns 87 million Rivian shares. Also, 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 behind its first vehicle recall would be due to issues with the airbag system. According to Rivian, the “Occupant Classification System may not deactivate the airbag when a child or child seat occupies the front passenger seat.” While Rivian attempts to power through its current situation, RIVN stock would be in the headlines this week.
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Today’s Stock Market Earnings
For today’s pre-market earnings, we have Wix (NASDAQ: WIX), Tower Semiconductor (NASDAQ: TSEM), and Monday.com (NASDAQ: MNDY), on deck. Also, the likes of Weber (NYSE: WEBR), and Warby Parker (NYSE: WRBY) are also providing financial updates at this time. Alternatively, there are also several noteworthy names reporting earnings in the post-market hours. This includes Take-Two (NASDAQ: TTWO), Sundial Growers (NASDAQ: SNDL), Highpeak Energy (NASDAQ: HPK), Nu (NYSE: NU), and Stratasys (NASDAQ: SSYS). From economic data and corporate activities to earnings, there is plenty of stock market news to take in today.
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