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Markets Await Big Box Retail Earnings Report

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For the third month in 2022 so far — and the second in the last three months — the Empire State Manufacturing Index for May posts a negative headline number: -11.6, nearly as low as the -11.8 we saw in March. Forecasts were for around 16.5, which was already notably down from the April headline 24.6. This would be a data point in a narrative of “stagflation,” which nobody in the U.S. wants to see.

Over the trailing 12 months, the average manufacturing productivity index for the state of New York is 16.6, with a solid 43.0 posted in July of last year. But like most everything else these days, 2022 is proving itself to be of a different — and less productive — ilk.

This week brings us the final leg of Q1 earnings season, which is the Retail sector. Many retailers stagger their fiscal years to fit the entire of holiday shopping season into Q4 (including the month of January), so as a result they are a month off the earlier-reporting companies like the Big Banks at the start of earnings season.

Thus, Walmart ((WMT - Free Report) brings out its quarterly results tomorrow, where it is expected to bring earnings of $1.46 per share on $138.27 billion in sales. The Zacks Rank #4 (Sell)-rated big-box retailer has only come up short on consensus earnings estimates three times in the past five years. Walmart shares are still in positive territory year to date, although they are notably off their April 21st highs.

Other market news we’re following includes a surprise development from JetBlue ((JBLU - Free Report) making a “hostile tender offer” of $30 per share for Spirit Airlines ((SAVE - Free Report) . You’ll remember a few months back Spirit and Frontier Airlines ((ULCC - Free Report) were planning a merger worth $6.6 billion. At this hour, it would appear that merger still has a better chance of occurring than this new hostile bid, although some are speculating this new wrinkle is designed not to buy the discount airline but to keep the merger from taking place. To be continued…

Pre-market futures are dipping slightly back in the red at this hour, following a robust end to a frankly lousy week for market participants last week. Economic data will include Retail Sales and Housing Starts, along with Weekly Jobless Claims, but will in general be a little lighter on grist for the economic mill. Keep a close eye on the retailers reporting — especially when they give guidance for the current quarter and the full year.