Here are the most important news, trends and analysis that investors need to start their trading day:
1. Wall Street set to rise ahead of Fed decision, after weaker ADP data
Traders on the floor of the NYSE, May 3, 2022.
U.S. stock futures pointed to a higher open on Wednesday ahead of the conclusion of the Federal Reserve’s two-day meeting in May, which will almost certainly see interest rates hike aggressively by 50 basis points to combat inflation. If pre-market gains were to hold at the close, it would be the third consecutive positive session for the Dow Jones Industrial Average, S&P 500 and Nasdaq, the first time it has happened since March.
- The Dow Jones rose 0.2% on Tuesday. The S&P 500 climbed almost 0.5% and the Nasdaq 0.2%.
- On Monday, the first trading day of May, the S&P 500 hit a new 2022 intraday low before Wall Street rallied and closed higher across the board.
- Throughout April, the Nasdaq had its worst month since October 2008. The Dow Jones and S&P 500 had their worst since March 2020, the month the Covid pandemic was declared.
2. Bond yields rise as investors eye a much more aggressive Fed
Traders work, as Federal Reserve Chairman Jerome Powell is seen on a screen delivering remarks, at the New York Stock Exchange (NYSE) in New York, March 16, 2022.
Brendan McDermid | Reuters
The benchmark 10-year Treasury yield on Wednesday rose, but traded below the previous session’s push above 3% for a December 2018 high. The Fed’s May meeting ends at 2 p.m. ET and Chairman Jerome Powell holds his typical post-meeting press conference. 30 minutes later.
- Respondents to TBEN’s May Fed survey expect the central bank to raise rates another 50 basis points next month as it also seeks to shrink its balance sheet. Respondents also anticipate a recession at the end of the Fed’s tightening cycle.
- The market expects rate hikes of at least 25 basis points at the Fed’s July, September, November and December meetings, such as the March meeting, which was the first rate hike in more than three years. .
- ADP said Wednesday morning that U.S. businesses added a much weaker-than-expected 247,000 jobs in April, as employers continue to struggle to find workers to fill vacancies. The ADP data was not the best indicator of the government’s monthly payroll count, which comes Friday.
3. Lyft and Uber sink after ride-sharing companies report patchy neighborhoods
A sign indicates a meeting location for Lyft and Uber users at San Diego State University in San Diego, California, May 13, 2020.
Mike Blake | Reuters
Lyft shares fell about 27% in premarket on Wednesday morning after the ride-hailing company said it would increase spending to attract more drivers, leading to forecasts falling short of expectations. analyst forecasts. First-quarter earnings of 7 cents a share beat estimates for a loss of 7 cents. Revenue of $876 million also beat estimates. Lyft reported 17.8 million active riders in the first quarter, narrowly missing estimates and lower than the 18.73 million in the fourth quarter.
Uber shares fell 9% premarket after the rides and logistics giant on Wednesday morning reported a better-than-expected first-quarter revenue increase to $6.85 billion. The company said it was continuing to recover from the lows of the pandemic and would not have to make “significant” investments to retain drivers. Uber announced a net loss of $5.9 billion for the first quarter, mainly due to its equity investments.
4. Moderna Blows Earnings Estimates; CVS Health raises its outlook
The Moderna Covid-19 vaccine is prepared for administration before a free distribution of over-the-counter Covid-19 rapid test kits to people receiving their shots or boosters at Union Station in Los Angeles, California, January 7, 2022.
Frederic J. Brown | TBEN | Getty Images
Moderna sold $5.9 billion of its Covid vaccine in the first quarter, shattering revenue and profit expectations. Shares of the company climbed about 4% in premarket trading. The biotech name on Wednesday maintained its full-year forecast of $21 billion in Covid vaccine sales. CEO Stephane Bancel said he expects Moderna to see even stronger vaccine sales in the second half as governments order more vaccines to prepare for fall vaccination campaigns.
A CVS pharmacy is seen in Bloomsburg.
Paul Tisserand | light flare | Getty Images
Shares of CVS Health rose about 1.5% premarket after the pharmaceutical and benefits management giant reported better-than-expected first-quarter earnings and revenue on Wednesday morning. CVS said demand for prescriptions increased due to a more typical cough, cold and flu season in the first trimester. Sales of over-the-counter Covid test kits helped results, but coronavirus vaccines and in-store testing declined. CVS also raised its forecast for the full year.
5. Starbucks suspends guidance and softens benefits amid labor campaigns
Starbucks Chairman and CEO Howard Schultz speaks during the annual shareholder meeting in Seattle, Washington on March 22, 2017.
Jason Redmond | TBEN | Getty Images
Starbucks shares rose 7% in premarket on Wednesday, the morning after the coffee company’s second fiscal quarter revenue beat estimates. Profit equaled. Starbucks suspended its outlook for fiscal 2022, citing lockdowns in China, inflation and investment in its stores and employees. Chinese comparable store sales fell 23%. Same-store sales in the United States increased 12%.
Starbucks said it would raise wages for incumbent workers and double training for new hires as the company and interim CEO Howard Schultz seek to push back on unionization efforts. Starbucks will not offer enhanced benefits to workers at the roughly 50 company-owned coffee shops that voted to unionize. Such changes at unionized stores would have to go through negotiation, the company said.
—TBEN Samantha Subin, Jesse Book, Sarah Min, Vicky McKeever, Patti Domm, Steve Liesman, Jessica Bursztynski, Spencer Kimball, Melissa Repko and Amelie Lucas contributed to this report.
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