Stock Market Futures Point To Gains After The Juneteenth Holiday
U.S. stock futures are on the rebound in early morning trading today. It seems that investors are keen to buy into the current weakness in stocks ahead of this week’s opening bell. Following the Juneteenth holiday, however, there remain plenty of broad-based headwinds looming over the stock market today. Namely, this follows the Federal Reserve’s latest move to raise its benchmark interest rate by 75 basis points last week. For reference, this would be the largest increase in almost three decades.
On top of that, Fed chair Jerome Powell is also supplementing this move by noting that further aggressive policy tightening could be in line. This would be the case as the central bank continues its prolonged fight against rampant inflation. With all this in mind, market analysts continue to suggest that a possible “soft landing” by the Fed is less likely. Simply put, analysts over at JPMorgan (NYSE: JPM) argue that the S&P 500’s current losses imply an 85% chance of recession. For the week ahead, investors will likely be tuning in to Fed chair Jerome Powell again. Accordingly, he is set to testify before the U.S. Senate Banking Committee on Wednesday morning.
In Powell’s words, “We’re not trying to induce a recession now, let’s be clear about that,” He adds that he and his team are “acutely focused on returning inflation to our 2% objective.” As of 4:48 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading higher by 1.65%, 1.86%, and 2% respectively.
Spirit Airlines In The Spotlight As JetBlue Raises Takeover Offer
On the airline industry front, shares of Spirit Airlines (NYSE: SAVE) are coming into focus yet again. For the most part, this is likely thanks to the latest update from JetBlue (NASDAQ: JBLU) regarding the takeover saga. In brief, JetBlue is currently in the running to acquire Spirit alongside rival airline firm Frontier Group (NASDAQ: ULCC). As travel demand continues to pick up across the board, “ultra-low-cost carriers” such as Spirit would be go-to’s for consumers looking to fly. Because of this, Monday’s deal update from JetBlue would have this story making headlines in the stock market today.
Getting into it, JetBlue is raising its current offer to acquire Spirit to $33.50 per share. This would represent a sizable $2 per share price increase on JetBlue’s end. Following this increase, Spirit stockholders could receive a payment of $32 per share should JetBlue win the takeover war. Additionally, there will also be a prepayment of $1.50 per share in cash, according to JetBlue’s official statement.
Speaking on all this in further detail is Jetblue’s CEO, Robin Hayes. He states, “After discussions with the Spirit team last week and further due diligence review, we are more convinced than ever that a JetBlue-Spirit transaction would create a true national competitor to the Big Four and deliver value to all of our stakeholders.” Not to mention, even analysts over at JPMorgan appear bullish on SAVE stock because of all this. The firm recently upgraded SAVE stock to an ‘Overweight’ rating from ‘Neutral’, citing the likelihood of a deal. Because of this, I could see investors eyeing SAVE stock at the opening bell later today.
Pfizer Acquires 8.1% Stake In Valneva In Efforts To Bolster Lyme Disease Vaccine
In other news, pharmaceutical industry titan Pfizer (NYSE: PFE) appears to be hard at work expanding its portfolio. As of yesterday, the company is buying an 8.1% stake in a French biotech firm, Valneva (NASDAQ: VALN). For some context, Valneva primarily operates as a vaccine maker. Its developmental pipeline is currently focusing on commercializing vaccines for infectious diseases. Among these would be Lyme disease. Notably, this would be among the key reasons for Pfizer’s move on the company. Overall, the duo, since 2020, have been and still are working on the development of a Lyme disease vaccine, VLA15. According to Pfizer and Valneva, VLA15 is set to go into late-stage trials in the third quarter of the current year.
Through the current agreement, Pfizer will be investing $95 million into Valneva. This would represent 8.1% of its share capital at about $9.99 per share. According to Valneva, this latest round of investments will directly contribute to the Phase 3 development of its VLA 15 program. For one thing, Pfizer appears to be hard at work growing its offerings even as the pandemic persists globally. As the company continues to diversify beyond Covid-19, investors could be considering PFE stock in the stock market now.
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Chevron and Egypt To Look Into New Mediterranean Gas Deal
Meanwhile, Chevron (NYSE: CVX) is building its relations in the Middle East now. On the whole, this is apparent following its latest operational update regarding its operation in Egypt. According to Chevron, it has signed a memorandum of understanding with Egypt’s state-owned gas company EGAS. Through the current agreement, the duo are planning to explore sending natural gas from offshore Mediterranean fields to Egypt. Once there, it will go through processing for export.
According to the Egyptian petroleum ministry, Chevron is planning to drill its first exploration well in the eastern Mediterranean Sea. This would be off the coast of Israel. Furthermore, Chevron is also considering gas monetization options in the region as well. The likes of which, according to the report, would include floating liquefied natural gas (LNG) tech. Should the duo come to a deal, Chevron notes that it aims to make gas available to Egypt’s domestic market. As such, it would not surprise me to see CVX stock gaining attention later.
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Bitcoin Regains Momentum After Hitting 2017 Levels Over Weekend
Bitcoin (BTC) appears to be finding its footing after two back-to-back weekends of sell-offs. As it stands, the leading cryptocurrency is currently at a value of above $20,000. Even so, over the recent weekend, Bitcoin hit a low of $17,601.58. This comes at a time when waves of economic uncertainty continue to impact riskier assets. Accordingly, this would include the likes of cryptocurrencies such as Bitcoin and Ethereum (ETH) among others.
Weighing in on this is crypto market analyst Yuya Hasegawa from a Japanese Bitcoin exchange Bitbank. He argues, “Bitcoin’s weekend dip was, to put it simply, not deep enough.” Hasegawa explains, “The macro environment has not really changed from last week’s FOMC meeting: there still has not been a clear sign of inflation coming down and the Fed may still drive the economy into recession by raising rates too aggressively or simply by failing to tame inflation.” After considering all of this, we could see further volatility in the crypto space this week.