Stock Market Futures Tank As Key Inflation Measure Hits 40-Year High
U.S. stock futures are well in the red ahead of this week’s opening bell. Understandably, this would be the case as inflation continues to run rampant. This is apparent from last week’s May Consumer Price Index (CPI) figures. According to the CPI release, consumer prices are up by 8.6% year-over-year throughout the month, above consensus estimates of 8.3%. This would be its fastest acceleration since late 1981, placing further pressure on the Federal Reserve. All in all, the central bank is expected to announce at least a half-point rate hike on Wednesday.
However, with inflation steadily on the rise, some would argue that larger hikes could be incoming. Commenting on this is Seema Shah, the chief strategist over at Principal Global Investors. She writes, “The Fed’s price stability resolve is going to be really tested now.” Shah continues, “Policy rate hikes will need to be relentlessly aggressive until inflation finally starts to fade, even if the economy is struggling.” While you consider all that, here’s how the major U.S. stock futures are doing now. As of 5:14 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading lower by 1.91%, 2.40%, and 2.93% respectively.
Tesla Reveals Plans For 3-For-1 Stock Split Via SEC Filing
Coming in hot ahead of the opening bell today is electric vehicle (EV) goliath Tesla (NASDAQ: TSLA). For the most part, the company would be in focus this week after filing for a 3-for-1 stock split. This information comes from Tesla’s annual proxy statement filing with the SEC. This would mirror similar moves from some of the biggest companies in the tech space as well. Namely, companies such as Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOGL) have also initiated splits. While there’s no change in the company’s fundamentals, such a move could make TSLA stock more appealing to more retail investors.
Providing further clarification on the reason behind the split is Tesla, via its filing. The company writes, “Our success depends on attracting and retaining excellent talent.” Additionally, Tesla also states, “We believe the Stock Split would help reset the market price of our common stock so that our employees will have more flexibility in managing their equity.” As most would know, stock splits are essentially cosmetic when it comes to growing businesses. Because of all this, I could see TSLA stock receiving plenty of attention today.
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Crypto Markets Slashed By $100 Billion Over Following Warning From U.S. Treasury Secretary Janet Yellen
In other news, crypto markets appear to be under pressure now. Over the weekend, Bitcoin (BTC) and Ethereum (ETH) among other major digital currencies are looking at substantial losses. According to current estimates, the industry as a whole is looking at losses of about $100 billion. Worth noting, this follows commentary from U.S. Treasury Secretary Janet Yellen regarding the long-term viability of crypto as an investment. Last week Yellen spoke on the matter at an event organized by the New York Times. In response to investment firm Fidelity’s move to allow Bitcoin as an investment option in 401(k) plans she said, “It’s not something that I would recommend to most people who are saving for their retirement … To me it’s very risky investment.”
Evidently, such a stark warning from the U.S. Treasury Secretary is heavily weighing in on the crypto space now. Over the weekend, Bitcoin is down by over 12% from a price tag of $29,063.10 on Saturday, June 11 to $25,490.50 early on Monday morning this week. To put things into perspective, this would be its lowest value since late 2020. Among the other key crypto names experiencing double-digit losses this weekend Ethereum, XRP (XRP), Solana (SOL), and Cardano (ADA). Overall, as markets continue to experience volatility amidst soaring inflation, arguably riskier plays such as crypto would follow suit. The real question now is whether investors should be jumping on the current weakness in the space.
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TotalEnergies Lands $29 Billion Gas Project With Qatar State-Owned Energy Firm
TotalEnergies (NYSE: TTE), a French multinational integrated energy and petroleum company is also in the news now. On the whole, this is thanks to the company’s latest strategic partnership in Qatar. According to a press release from state-owned oil and gas firm, Qatar Energy, the duo are working together via a $29 billion project. The likes of which revolve around expanding the North Field East liquefied natural gas (LNG) project. As it stands, TotalEnergies is among the first few partners to be announced for the deal.
More importantly, through the current agreement, TotalEnergies’ 25% stake in the project will remain the highest. This information is courtesy of Saad al Kaabi, Qatar’s energy minister and head of Qatar Energy. Speaking on this is TotalEnergies CEO Patrick Pouyanne. He says, “We had announced that we are no longer investing in any new project in Russia, so the signing of this project in Qatar is important for us.” With the company actively adapting its operations, TTE stock could be worth considering among its energy industry peers.
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Oracle Earnings Preview: What To Consider
On the earnings front today, Oracle (NYSE: ORCL) would be among the key names to look out for. In detail, the computer tech giant is set to report its fourth fiscal quarter results after the closing bell today. Getting straight into it, consensus figures on Wall Street are earnings of $1.38 per share on revenue of $11.66 billion. With Oracle being among the largest software companies in the world, investors could be keen to see how it performs. If anything, the recent earnings beat from Salesforce (NYSE: CRM) would contribute to the hype around ORCL stock today.
In fact, even analysts from Morgan Stanley (NYSE: MS) appear to be bullish on Oracle now. Just last week, MS analyst Keith Weiss provided a positive update on the company’s growth prospects. According to Weiss, high-margin businesses like Oracle’s would be trading at “reasonable valuations,” now. This, he argues, would be the case amidst steadily rising interest rates and multiple compression. As such, the analyst believes that “Oracle presents an interesting opportunity for better-than-expected EPS growth in a choppy marketplace.” Notably, Weiss has an Outperform rating and price target of $88 on ORCL stock now. With all this in mind, investors may be eyeing it in the stock market today.
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