Stock Market Futures Rise Following Day Of Broad-Based Sell-Offs
U.S. stock futures are moving towards the green in early morning trading on Tuesday this week. This follows a sizable downturn in markets across the board as investors digest the latest inflation figures. With consumer prices skyrocketing at 40-year-high rates, investors are likely anticipating further action from the Federal Reserve this week. Namely, this would be in the form of further interest rate hikes with mentions of a potential 75 basis point increase. As central bank policymakers kick off their latest meeting today, investors appear to be trading cautiously.
Providing some further insight into the current state of markets is Michael Pearce, a senior U.S. economist at Capital Economics. He starts by saying that there is not much in the details of the latest consumer price report to “suggest that inflationary pressures are easing.” Pearce adds, “The surge in energy prices this month means that headline inflation will remain close to 8.6% in June. Together with the continued strength of the latest activity data, that bolsters the argument of the hawks at the Fed to continue the series of 50 bp [basis point] rate hikes into September and beyond, or even to step up the size of rate hikes at coming meetings.“
All in all, there remains an air of unpredictability across the broader stock market now. While investors tune in to the Fed’s latest policy meeting, there remains plenty of stock market news to consider today as well. As of 5:29 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading higher by 0.34%, 0.46%, and 0.71% respectively.
Oracle In Focus After Beating Top And Bottom Line Estimates In Latest Quarterly Update
To begin with, shares of Oracle (NYSE: ORCL) seem to be drawing attention in the stock market today. For the most part, this likely stems from the company’s fourth fiscal quarter results. After yesterday’s closing bell, the software industry goliath posted commendable figures across the board. According to the company’s press release, Oracle’s total earnings per share for the quarter is $1.54. Additionally, its total quarterly revenue is $11.84 billion. For comparison, this is versus consensus figures of $1.37 and $11.66 billion respectively. As a result of these beats, investors would be looking at ORCL stock now. This would especially be the case as markets look to recover from yesterday’s substantial losses.
Speaking on Oracle’s overall performance for the quarter is CEO Safra Catz. She states, “We continued to improve our top-line results again this quarter with total revenue growing 10% in constant currency.” Catz explains further, “These consistent increases in our quarterly revenue growth rate typically have been driven by our market-leading Fusion and NetSuite cloud applications. But this Q4, we also experienced a major increase in demand in our infrastructure cloud business—which grew 39% in constant currency. We believe that this revenue growth spike indicates that our infrastructure business has now entered a hyper-growth phase.” In essence, it seems that the company’s cloud infrastructure business continues to take off. Seeing as it is actively competing with Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT) here, this is commendable.
Not to mention, Oracle also recently completed the acquisition of Cerner, a leading provider of digital information health care systems. After pairing this with its rapidly growing cloud division, Oracle appears to be on a roll. As such, I could see ORCL stock making headlines at the opening bell today.
Redbox Among Latest Short-Squeeze Targets, Surges Past Acquisition Price
In other news, Redbox Entertainment (NASDAQ: RDBX) appears to be the focus of a retail investor-led short-squeeze. On the whole, this is apparent as the company’s shares continue to see immense volatility. Evidently, RDBX stock saw gains of over 22% yesterday with trading volumes crossing the 55 million mark yesterday. This would be substantially above double its average daily volume of about 19 million shares. As with most companies in this space, mentions of the company’s shares on the infamous WallStreetBets page on Reddit reportedly surged by 400% throughout Monday.
Furthermore, it is important to note that RDBX stock is now up by a whopping 430% over the past month. As of Monday’s closing bell, the company’s shares are now up to a valuation of $15.27. This would place the video rental firm’s stock well above the acquisition price which Chicken Soup for the Soul Entertainment (NASDAQ: CSSE) is offering. For some context, Redbox agreed to be acquired by CSSE back on May 11 last month. Through the existing deal, Redbox stockholders will be receiving a fixed exchange ratio of 0.087 of a share of CSSE class A common stock per Redbox share. With CSSE stock’s closing price of $7.69, the problem with the deal is apparent. As both firms look to sort this series of events out, RDBX stock would be in focus now.
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Crypto Markets Decline Further Dipping Below $1 Trillion Market Cap; Major Crypto Exchanges Halt Trading
At the same time, the crypto market, in general, remains on a downtrend now. Following one of its worst days this year, the industry’s total market cap is below the $1 trillion mark. For reference, its last peak of $3 trillion was back in November 2021, over half a year ago. Overall, the persisting sell-off would be due to investors reducing their holdings in riskier assets such as crypto. After considering the volatility that digital currencies often experience, this is not too surprising.
Moreover, in response to the decline in crypto markets, both Binance and Celsius, major crypto trading platforms are on the defensive. Just yesterday, Celsius paused all inter-account transactions on its platform. Simply put, this includes all withdrawals, swaps, and transfers between accounts. The firm cites “extreme market conditions” as a key reason for this. Also, Binance halted Bitcoin withdrawals for three hours on its platform yesterday due to a “stuck transaction causing a backlog.” Because of this, cryptocurrency stocks such as Coinbase (NASDAQ: COIN) and MicroStrategy (NASDAQ: MSTR) continue to be under pressure.
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Boeing Stock Trades At Pandemic-Era Values; CEO Dave Calhoun On Demand For Airplanes
Alongside the broader market, shares of Boeing (NYSE: BA) are also feeling the heat now. In fact, BA stock, following losses of over 8% yesterday, is now trading at levels last seen over two years ago. Naturally, as inflation continues to soar, investors would be less enthusiastic about the company’s growth prospects. Even as the travel industry rebounds, continuously rising prices would eventually weigh on consumer spending.
Despite all of this, Boeing CEO Dave Calhoun appears to have a different take on the matter. In an interview with Reuters yesterday, Calhoun argues that demand for aircraft, in general, is holding strong. Notably, the CEO argues that this trend will grow stronger as airlines look to update their aging fleets. In his words, “Demand for airplanes is as robust as I’ve ever seen it… [It’s] more than a bubble.” Should this be the case, long-term investors may be considering BA stock in the stock market today.