Stock Market Futures Rose After Powell Hints At ‘Possibility’ Of Recession
U.S. stock futures are inching towards the green in early morning trading today. Overall, this would be following Federal Reserve Chairman Jerome Powell’s latest statements. In his latest remarks before the Senate Banking Committee, Powell does mention the dreaded “R-word”, recession. Before getting into that, Powell does note that the Fed is “strongly committed” to addressing inflation. Aside from the shift in tone, Powell also highlights that recession in the U.S. is now a “possibility.” On top of that, he also says that a soft landing by the Fed would be a “very challenging” feat.
Across the board, analysts continue to mention that the Federal Reserve is now playing catch-up with its inflation intervention. For instance, we could look at what Dan Greenhause, the chief strategist at Solus Alternative Asset Management has to say on this. He starts by stating, “The odds are more likely in favor of a recession than not.” Greenhause continues, “That speaks to the degree of tightening that the Federal Reserve is going to have to do now, having not done so in prior periods when perhaps they would have avoided some of the problems that are going to happen as a result.” Aside from this, there is no shortage of notable news to consider in the stock market today as well. As of 6:10 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading higher by 0.13%, 0.35%, and 0.70% respectively.
Chinese EV Stocks In Focus As State Council Announces Measures To Bolster National Car Sales
On the automotive side of things, Chinese EV firms appear to be getting a boost today. For the most part, this could be thanks to the latest update from China’s Premier Li Keqiang. In a videoconference, Premier Li alongside China’s President Xi revealed a series of initiatives to bolster the nation’s efforts to hit its economic targets for 2022. Among the core focuses in this, according to Premier Li, would be a focus on boosting auto sales.
As it stands, the Chinese government is now planning to implement measures that will, ideally, boost auto sales by an estimated $29.85 billion (200 billion yuan) this year. According to data from Goldman Sachs (NYSE: GS), that would translate to roughly 0.5% of China’s total retail sales from 2021. As such, Chinese EV stocks like Nio (NYSE: NIO), Li Auto (NASDAQ: LI), and Xpeng (NYSE: XPEV) could be on investors’ radars now.
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Kohl’s Dips Following Reports On Franchise Group Lowering Takeover Offer
Front and center in the stock market news cycle today is the Kohl’s Corporation (NYSE: KSS). For some context, this department store retail chain operator has been on acquisition watch for the past few months. After receiving numerous takeover offers, KSS stock also received plenty of attention from investors at the time. Eventually, the company settled with a bidder by the name of Franchise Group (NASDAQ: FRG). Following the latest update on the company’s bid for Kohl’s KSS stock is once again in the limelight.
Getting straight into it, Franchise Group is now considering lowering its offer for Kohls. Should this happen, it would lead to a decrease from the company’s initial $60 per share offer to a $50 per share one instead. On the whole, this information comes from a recent CNBC report stating that Franchise Group is considering whether acquiring Kohl’s would be the “best use case,” for its capital. For one thing, this would be within the three-week time period that the duo agreed upon to allow for the confirmation of any due diligence and final financing arrangements. The likes of which will end this weekend.
For now, the source from CNBC suggests that things are still in the evaluation stage. This would also line up with another Reuters report from earlier this week as well. In general, it says that Franchise Group is in talks to retain the management over at Kohl’s, should the sale succeed. Regardless, as more updates roll in regarding Kohl’s KSS stock would be in focus now.
Altria Falls After Mentions Of FDA Pulling Juul From Shelves Surfaces
In other news, Altria (NYSE: MO) seems to be experiencing some turbulence following a recent regulatory update. To begin with, the U.S. Food and Drug Administration (FDA) may be looking to pull Juul e-cigarettes from store shelves. This follows years of scrutiny from regulatory officials regarding the company’s sale of fruit-flavored vape pods that are now popular with teens. The latest news on this FDA update comes from a report by the Wall Street Journal (WSJ). Should this WSJ report be true, and the FDA is coming after Juuls, Altria would be in the spotlight. After all, the company does have a 35% stake in the company. This would be the case following its $12.8 billion investment in the firm back in 2018.
Since then, Altria has taken several non-cash charges from the investment following regulatory pressures on Juul. As of March 31, Altria clarified that the current estimated fair value of its investment in the e-cigarette company is about $1.6 billion. Not to mention, all this comes even as the FDA nears the end of an almost two-year review of data on Juul’s tobacco and menthol-flavored products. All in all, with the FDA potentially looking to crack down on e-cigarettes with a marketing denial order, investors could be watching MO stock closely.
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Chevron Inks Deals For Additional U.S-Sourced Liquefied Natural Gas
Chevron (NYSE: CVX) continues to expand on the liquefied natural gas (LNG) front. This is apparent from two of its latest transaction announcements revealing LNG purchases from two U.S. exporters yesterday. For starters, the company now expects to receive 2 million tonnes per annum (mtpa) from Cheniere Energy (NYSEAMERICAN: LNG). According to the company, the full delivery of this will begin in 2027 and span 15 years.
Secondly, Chevron is also expecting an order of LNG from Venture Global, a private LNG developer. Similar to its agreement with Cheniere, Chevron also has a 2mtpa order here that spans 20 years. In the larger scheme of things, this would indicate that Chevron continues to expand the diversity of its oil offerings. Ideally, by signing these LNG offtake agreements, Chevron would be getting into the LNG game. This would be, of course, without the risks and costs of initial development efforts. As such, CVX stock could continue to draw attention from investors looking to bet on the energy industry today.