BY THE NUMBERS
US stock futures rebounded after Tuesday’s cooler inflation report and what could be an even more aggressive Federal Reserve interest rate hike on Wednesday. The S&P 500 officially closed Monday in bear market territory, defined as down 20% or more from its previous high, which was in January. The general market index also hit a new low for the year. (CNBC)
Monday’s sharp sell-off sent the S&P 500 down 3.9% and the Nasdaq, already in a bear market since March, down 4.7%. The Dow Jones sank 876 points, or 2.8%. The 30-stock average fell further in a correction, down 17% from its all-time high in January. A correction is defined as a decline of 10% or more from a previous high. All three stock market benchmarks have fallen for four sessions in a row. (CNBC)
The 10-year Treasury yield retreated on Tuesday from 2011 highs, trading around 3.3%, after the government’s Producer Price Index for May rose 10.8% year-on-year, a slightly smaller increase. than expected. The PPI is the flip side of inflation at the wholesale level, after last week’s consumer price index was higher than expected. The PPI remained close to its year-on-year all-time high of 11.5% in March. (CNBC)
Markets expect the Fed to hike rates by 0.75% at the end of its two-day June policy meeting on Wednesday. Only the magnitude of the rate increase is in question, as Fed Chairman Jerome Powell has repeatedly said that the 0.5% increases in June and July seemed appropriate. After the Fed’s May meeting, in which rates rose 0.5%, Powell scrapped a 0.75% hike. (CNBC)
* Cramer: Why we’re buying stocks ahead of Wednesday’s big Fed decision (CNBC Investing Club)
TODAY IN THE NEWS
Cryptocurrency exchange Coinbase will eliminate 18% of full-time jobs, according to an email sent to employees on Tuesday. CEO Brian Armstrong pointed to a possible recession, the need to manage costs and growth “too fast” during a bull market. Shares of Coinbase fell 7% premarket after closing down 11.4% on Monday. (CNBC)
Bitcoin briefly dipped below $21,000 overnight in Asia before recovering slightly. Crypto assets took a hit on Monday as concerns mount over lending platform Celsius and cryptocurrency exchange Binance briefly pausing withdrawals. Bitcoin, trading around $22,000 early Tuesday, is down about 68% from its all-time high in November. (CNBC)
* Novogratz says cryptocurrencies are going through a “long-term capital management moment” (CNBC Pro)
Shares of Oracle (ORCL) rose 11% in premarket on Tuesday, the morning after the database software company reported fiscal fourth-quarter earnings and revenue that beat estimates. Revenue rose 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)
Shares of Twitter (TWTR) rose 2.7% in premarket action on the news that Elon Musk would attend an employee meeting on Thursday. Musk, the 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 on Tuesday that its board will decide on competing offers from JetBlue Airways (JBLU) and Frontier Airlines (ULCC) ahead of a shareholder meeting later this month as the battle for the discount airline intensifies. . Spirit has postponed a shareholder voting meeting until June 30 to review the offers. (CNBC)
Donald Trump’s closest campaign advisers, top administration officials and even his family were dismantling his bogus 2020 voter fraud claims by Jan. 6, but the defeated president seemed “distant from reality” and continued to cling to theories. extravagant attempts to stay in power, he told the committee investigating the attack on Capitol Hill on Monday. (AP)
The FDA’s committee of independent vaccine experts will meet Tuesday to consider Moderna’s coronavirus vaccine (MRNA) for children ages 6 to 17. So far, Moderna’s vaccines have been licensed only for adults. On Wednesday, the panel will consider Moderna’s vaccine for children under 6 years of age and Pfizer’s (PFE) vaccine for children under 5 years of age. (NY Times)
ACTIONS TO SEE
Continental Resources (CLR) rallied 7.4% premarket after receiving a $70 per share “take private” offer 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% premarket on news that it will be added to the S&P SmallCap 600 Index. The change will be effective before 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 growing uncertainty about Best Buy’s earnings outlook for 2023.
Nokia (NOK) was upgraded to buy from neutral on Citi, citing improving fundamentals for the networking hardware and software maker. Citi points to a particular strength of 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 will be presenting today at Deutsche Bank’s Global Consumer Conference.
Philip Morris (PM) said it now expects better performance from its core business than previously anticipated, and continues to see growth in its IQOS e-cigarette business. The stock rose 1% before trading ahead of a company presentation at a Deutsche Bank conference today.