Monday, February 6, 2023
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5 things to know before the stock market opens Monday

Here are the most important news items that investors need to start their trading day:

1. Bad start for stocks

Stock futures fell Monday morning, indicating a soft opening to a crucial week for investors seeking clues about the state of the economy. All three major U.S. indices closed higher last week. For the S&P 500, it was the fourth winning week in a row. On Monday, though, markets were contending with bad economic news out of China (more on that below) while looking ahead to bellwether retail earnings reports (more on that below, too). There was some good news for consumers, though, as crude oil prices slipped following the weak China data, a sign that gas prices are going to come down even more.

2. Big week for retail earnings

Signage at a Walmart store in Secaucus, New Jersey.Lucas Jackson | Reuters

It's retailers' turn in the earnings spotlight. On Tuesday, Walmart, which made waves by slashing its forecast and cutting corporate jobs earlier this summer, will give investors a look at just how much inflation and overstocked inventories are cutting into margins. Target, which is deep into an inventory-reduction plan of its own, reports Wednesday. Home improvement retailers Home Depot and Lowe's report Tuesday and Wednesday, respectively. Then finally, on Thursday, Kohl's is set to report. Investors will be looking for clues about the department store chain's strategy after its deal with Franchise Group fell apart at the end of June.

3. Slow growth in China

Employees working on an air-conditioner production line at a Midea factory in Guangzhou, China.Jade Gao | AFP | Getty Images

Several soft economic data points from China weighed on stocks Monday morning. The government reported industrial production and retail sales growth that fell below analysts' expectations. Investment in manufacturing slowed down, while a decline in real estate investment accelerated. The Chinese economy has struggled to shrug off the impact of strict Covid restrictions, while its real estate sector is suffering from reduced cash flow as many homebuyers have stopped making mortgage payments to protest homebuilding delays.

4. Peloton makes cuts in search of growth

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