5 things to know before the stock market opens on Tuesday August 16

Here are the most important information investors need to start their trading day:

US stock markets were headed for a lukewarm opening on Tuesday morning after all three major indexes rose on Monday. In fact, the Dow Jones Industrial Average finished above its 200-day moving average for the first time since April. Investors also got their first taste of big retail profits on Tuesday as Home Depot and Walmart released their latest quarterly results (see below). Stocks had an overall strong summer after a brutal first half, prompting some market watchers to suggest a new bull market is beginning. Not so fast, however. Markets could experience a bumpy September, writes CNBC’s Patti Domm.

The retail giant posted healthy profits and revenue on Tuesday morning, while maintaining its guidance for the second half. Earlier disclosures set the stage for the results. Last month, Walmart warned its profits would be squeezed as customers, dogged by skyrocketing inflation, sought bargains on low-margin items such as groceries as they shunned more profitable discretionary items like electronics. The retailer, like others in the space, also faced a glut of excess inventory as shoppers changed their behaviors. Revenues aren’t the only big news for walmart this week. On Monday, the retailer announced an agreement to bring the Paramount+ streaming service, which hosts “Paw Patrol” and “Star Trek: Strange New Worlds,” to Walmart+ subscribers.

The home improvement retailer beat Wall Street expectations on the top and bottom lines. The company also stuck to its outlook for the year, even as Americans grapple with high inflation. Home deposit sales reflect the strength of high-end consumers hiring professional contractors. “Our performance reflects continued strength in demand for home improvement projects,” Home Depot CEO Ted Decker said in a statement accompanying the earnings release. However, it wasn’t all rosy: the company said the total number of customer transactions fell to 467.4 million from 481.7 million in the year-ago quarter. Rival home improvement retailer Lowe’swhich is aimed more at DIYers and could offer a clearer picture of the general consumer, reports its results Wednesday morning.

The housing market continues to take strange turns. Homebuilder sentiment fell into negative territory this month, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Apart from a brief moment in the early days of the covid pandemic, this is the first time this has happened since 2014, reports CNBC’s Diana Olick. “Tightening monetary policy from the Federal Reserve and persistently high construction costs have caused a housing slump,” said NAHB chief economist Robert Dietz. Mortgage rates have come down from recent highs, but are still nearly double what they were at the start of the year. House prices also continue to rise and supply remains tight.

“Top Gun: Maverick” can’t keep printing money forever. We are officially in the doldrums of summer box office season. August and September are traditionally fairly low months for big releases, but this year is particularly sluggish as studios, disrupted by the Covid pandemic, simply don’t have as much product to release. So two of the biggest players, Disney and Sony, are turning to some old favorites for the juice business. Sony’s “Spider-Man: No Way Home,” which has already grossed over $1.8 billion worldwide, returns in September. Disney, meanwhile, is promoting two big releases along with a few re-releases. Ahead of its Disney+ series, “Andor,” the studio is releasing 2016’s “Rogue One: A Star Wars Story” and re-releasing 2009’s “Avatar” to tease the long-awaited sequel, “Avatar: The Way of Water.” “, scheduled for December.

– CNBC’s Carmen Reinicke, Melissa Repko, Jack Stebbins, Diana Olick and Sarah Whitten contributed to this report.

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