Here are the most important news, trends and analysis that investors need to start their trading day:
1. Dow set to open slightly lower after 7 straight weeks of selling
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., May 13, 2022.
Brendan Mcdermid | Reuters
U.S. stock futures fell slightly Monday after the Dow Jones Industrial Average declined for a seventh week in a row, the first time that’s happened in more than two decades. The S&P 500 and the Nasdaq both dropped for six straight weeks for the first time since 2011 and 2012, respectively.
- Despite Friday’s strong rally, led by the Nasdaq’s 3.8% advance, all three stock benchmarks finished with weekly losses of more than 2%. The Nasdaq remained in a bear market, with the Dow and the S&P 500 both in sharp corrections.
- The 10-year Treasury yield was steady Monday, just under 3%. U.S. oil prices dipped but were still roughly $109 per barrel. Crypto fell again, with bitcoin at roughly $30,000 early Monday.
- Retail earnings kick off Tuesday and the government is out with April retail sales data. Investors hope to gain insight from these reports on how consumers are reacting to rising inflation and whether the Federal Reserve might be swayed to act more aggressively in hiking interest rates to stamp out price pressures.
- Former Fed Chairman Ben Bernanke said the current central bank erred in waiting to address inflation. “One of the reasons was that they wanted not to shock the market,” he told CNBC’s Andrew Ross Sorkin in an interviewed that ran on television Monday.
2. JetBlue goes hostile with its Spirit Airlines takeover offer
A JetBlue airliner lands past a Spirit Airlines jet on taxi way at Fort Lauderdale Hollywood International Airport on Monday, April 25, 2022. (Joe Cavaretta/Sun Sentinel/Tribune News Service via Getty Images)
Joe Cavaretta | Sun Sentinel | Getty Images
JetBlue Airways on Monday took its all-cash offer to buy Spirit Airlines hostile. In a letter to Spirit shareholders, JetBlue offered $30 per share and wrote it was ready to go to $33 if the board engages to negotiate a “consensual transaction.” Shares of Spirit rose nearly 10% to more than $18 per share in premarket trading, far lower than the offer prices.
- Earlier this month, Spirit rejected JetBlue’s all-cash offer of $33 per share, or $3.6 billion, citing regulatory concerns. At the time, Spirit said it was sticking with a deal to merge with fellow ultra-low-cost carrier Frontier Airlines, an agreement struck in February valued at $2.9 billion.
3. McDonald’s to sell its Russia business due to Putin’s Ukraine war
A woman walks along a street past a banner offering job at McDonald’s in the town of Pokrov in Vladimir Region, Russia March 21, 2022.
Evgenia Novozhenina | Reuters
McDonald’s said Monday it will sell its business in Russia, a little more than two months after it paused operations in the country due to its unprovoked invasion of Ukraine. McDonald’s said its “continued ownership of the business in Russia is no longer tenable,” and it’s not consistent with its values.
McDonald’s first opened in Russia 32 years ago. It has more than 800 restaurants and 62,000 employees in Russia. The company said it’s seeking a local buyer. The McDonald’s announcement Monday is a stark indication of how much the Western world has turned against Russian President Vladimir Putin’s regime.
4. Tesla said to be delaying its Shanghai production ramp-up
A truck leaves the Tesla Shanghai Gigafactory on April 25, 2021 in Shanghai, China.
Visual China Group | Getty Images
Tesla has delayed by at least a week a plan to restore production at its Shanghai plant to levels before the city’s Covid lockdown more than six week ago, according Reuters, citing an internal memo. Companies in Shanghai, China’s biggest city, are only allowed to reopen if they can operate under such an arrangement, which requires workers to be isolated.
Shanghai aims to reopen broadly and allow normal life to resume from June 1, a city official said Monday, after declaring that 15 of its 16 districts had eliminated cases outside quarantine areas. In Beijing, dozens of new Covid cases have been discovered every day for the past three weeks. The Chinese capital is not under a citywide lockdown but is subject to virus mitigation curbs.
5. Elon Musk says Twitter’s legal team came after him over bot tweet
Elon Musk, CEO of Tesla and SpaceX, on Saturday tweeted that Twitter’s legal team accused him of violating a nondisclosure agreement by revealing the sample size for the social media platform’s checks on automated users. “Twitter legal just called to complain that I violated their NDA by revealing the bot check sample size is 100,” he wrote.
Musk on Friday tweeted that his $44 billion cash deal to take the company private was “temporarily on hold” while he awaited data on the proportion of its fake accounts. In a second tweet Friday, he said he was “still committed” to the deal. Shares of Twitter fell more than 2% in Monday’s premarket after a roller-coaster ride Friday.
— CNBC’s Tanaya Macheel, Abigail Ng, Samantha Subin, Jesse Pound, Leslie Josephs and Mike Calia as well as Reuters contributed to this report.
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