BY THE NUMBERS
U.S. stock futures bounced after Tuesday’s cooler inflation report and what could be an even more aggressive Federal Reserve interest rate hike Wednesday. The S&P 500 on Monday officially closed in bear market territory, defined as a decline of 20% or more from its prior high, which was in January. The broad market index also hit a new low for the year. (CNBC)
Monday’s steep sell-off saw the S&P 500 lose 3.9% and the Nasdaq, already in a bear market since March, drop 4.7%. The Dow sank 876 points or 2.8%. The 30-stock average fell further into a correction, down 17% since its January record high. A correction is defined as a decline of 10% or more from a prior high. All three stock benchmarks have dropped for four sessions in a row. (CNBC)
The 10-year Treasury yield on Tuesday backed off 2011 highs, trading around 3.3%, after the government’s May producer price index rose 10.8% year over year, a slightly smaller rise than expected. The PPI is the other side of the inflation coin at the wholesale level, after last week’s hotter-than-expected consumer price index. The PPI remained near its historic year-over-year high of up 11.5% in March. (CNBC)
The markets expect the Fed to hike rates by 0.75% at the end of its two-day June policy meeting Wednesday. Only the magnitude of the rate increase is in question, as Fed Chairman Jerome Powell has repeatedly said that 0.5% rises in June and July looked appropriate. After the Fed’s May meeting, which saw rates go up 0.5%, Powell took a 0.75% hike off the table. (CNBC)
* Cramer: Why we’re buying stocks heading into Wednesday’s big Fed decision (CNBC Investing Club)
IN THE NEWS TODAY
Crypto exchange Coinbase will cut 18% of full-time jobs, according to an email sent to employees Tuesday. CEO Brian Armstrong pointed to a possible recession, a need to manage costs, and growing “too quickly” during a bull market. Shares of Coinbase fell 7% in the premarket after closing down 11.4% on Monday. (CNBC)
Bitcoin briefly dropped below $21,000 overnight in Asia before bouncing back slightly. Crypto assets were hammered Monday as concerns mount over lending platform Celsius and crypto exchange Binance briefly pausing withdrawals. Bitcoin, trading around $22,000 early Tuesday, has fallen roughly 68% from its all-time in November. (CNBC)
Oracle (ORCL) shares surged 11% in Tuesday’s premarket, the morning after the database software company issued fiscal fourth-quarter earnings and revenue that exceeded estimates. Revenue increased 5% to $11.84 billion from a year earlier, driven by growth in the company’s cloud infrastructure business, which competes with Amazon Web Services and Microsoft Azure. (CNBC)
Twitter (TWTR) shares rose 2.7% in premarket action following news that Elon Musk would attend an all-hands employee meeting on Thursday. Musk, CEO of Tesla and SpaceX, agreed in April to buy Twitter for $44 billion but has since threatened to back out of the deal. (Reuters)
Spirit Airlines (SAVE) said Tuesday its board will decide on competing offers from JetBlue Airways (JBLU) and Frontier Airlines (ULCC) before a shareholder meeting at the end of the month as the battle for the discount carrier heats up. Spirit postponed a shareholder voting meeting to June 30 to review the bids. (CNBC)
Donald Trump’s closest campaign advisers, top government officials and even his family were dismantling his false claims of 2020 election fraud ahead of Jan. 6, but the defeated president seemed “detached from reality” and kept clinging to outlandish theories to stay in power, the committee investigating the Capitol attack was told Monday. (AP)
The FDA’s committee of independent vaccine experts will meet Tuesday to consider Moderna’s (MRNA) coronavirus vaccine for kids 6-17. Thus far, Moderna’s shots have been authorized only for adults. On Wednesday, the panel will consider Moderna’s vaccine for children under 6 and Pfizer’s (PFE) vaccine for children under 5. (NY Times)
STOCKS TO WATCH
Continental Resources (CLR) rallied 7.4% in the premarket after receiving a $70 per share “take private” bid from Chairman Harold Hamm and his family. The company’s board will establish an independent committee to evaluate the proposal.
National Vision (EYE) soared 14.3% in the premarket following news that it will be added to the S&P SmallCap 600 index. The change will be effective prior to the opening of trading on Thursday.
Best Buy (BBY)fell 1.3% in premarket trading after Bank of America Securities downgraded the electronics retailer’s stock to neutral from buy. BofA points to increasing uncertainty about Best Buy’s 2023 earnings prospects.
Nokia (NOK) was upgraded to buy from neutral at Citi, which cites improving fundamentals for the networking hardware and software maker. Citi points to particular strength for Nokia in the mobile infrastructure market. The stock added 2.8% in premarket action.
Coty (COTY) – Coty rose 1% in premarket trading after the cosmetics company reaffirmed its financial outlook for both the current quarter and the full year. Coty is set to present at Deutsche Bank’s Global Consumer Conference today.
Philip Morris International (PM) said it now expects a better performance from its core business than previously anticipated, and that it continues to see growth in its IQOS smoke-free business. The stock rose 1% in the premarket ahead of a company presentation at today’s Deutsche Bank conference.