Stock futures rise as Wall Street awaits key inflation report

Barclays downgraded shares of Rent the Runway to neutral from outperform, citing concerns over the company’s active subscriber growth.

“The significant deterioration in Active Customer trends in the quarter (QoQ active sub growth slowed to -8% in 2Q vs Street +7%, decelerating from +17% in 1Q) suggest that RENT is more susceptible to macro pressure on the aspirational consumer than we expected,” analyst Michael Binetti wrote in a note.

Rent the Runway shares fell more than 22% in the premarket after the company announced it was laying off 24% of its corporate workforce.

—Sarah Min

The dollar index, which tracks the U.S. currency’s performance against six others, fell for a fifth straight day, potentially giving stocks a boost. Many large U.S. companies get a big chunk of their revenue from outside the U.S., meaning that a weaker dollar could boost their revenue.

The index traded 0.5% lower at 107.76.

BYD, a Chinese electric vehicle maker, could make big gains going forward, according to Barclays.

“BYD (Build Your Dream) became the #1 global EV maker in terms of deliveries in 2Q22, dethroning Tesla from that pedestal for the first time, and its triple-digit revenue growth rate is likely to continue for the rest of 2022, despite its already sizable base,” analyst Jiong Shao wrote in a Tuesday note.

The analyst also has a $40 per share price target on the stock, implying upside of 38% from Monday’s close.

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— Sarah Min

U.K. unemployment fell to 3.6% in the three months to July, its lowest since 1974.

The economic inactivity rate, meanwhile, rose by 0.4 percentage points to a five-year high of 21.7%.

The Office for National Statistics attributed the change to a rise in long-term sickness designations and students leaving the jobs market. The increasing tightness of the labor market may fuel further inflationary pressure and cause headaches for the Bank of England.

Annual growth in real wages — taking into account inflation — excluding bonuses fell by 2.8% in the three months to the end of July.

“People will understandably be looking to their employers for help during the cost of living crisis while Andrew Bailey will be hoping that businesses don’t up salaries too high too quickly and compound inflation,” said Marcus Brookes, chief investment officer at Quilter Investors.

“However, the U.K. must brace for discontent amongst the public sector with strikes over pay continuing as budgets are stretched.”

– Elliot Smith

UBS Group plans to increase its dividend by 10% to $0.55 per share and expects its 2022 share repurchases to exceed $5 billion, the Swiss bank said on Tuesday.

UBS shares were indicated 1.2% higher in pre-market activity after what ZKB analyst Michael Klien…