Stock Market Futures Surge Ahead Of Jam-Packed Week Of Economic Data
U.S. stock futures are in the green heading into this week’s opening bell. This seems to be the case even as investors have plenty of economic data to consider. In the week ahead, we have the Federal Reserve’s highly-anticipated interest rate hike, producer prices, and February’s retail sales figures to note. Regarding the Fed, some argue that potential interest rate hikes could be milder due to growing geopolitical tensions. This would not be all that surprising seeing as the global economy continues to feel the impacts of the war.
Providing some commentary on this is James McCann, a senior global economist from Aberdeen Standard Investments. McCann says that the Federal Reserve’s “job is not getting any easier.” The reason for this is, “Russia’s invasion of Ukraine has sparked market turmoil and sent commodity prices soaring, both of which present headwinds to the economy.” Looking ahead, investors may be keen to see if all this can temper the Fed’s hawkish stance on inflation. As of 7:03 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading higher by 1.15%, 1.01%, and 0.83% respectively.
Berkshire Hathaway Adds To Occidental Position With $1.5 Billion Stock Purchase
In the news now, we have Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A) again. To the surprise of some, the Oracle of Omaha is seemingly doubling down on his investments in Occidental Petroleum (NYSE: OXY). Just over a week after his firm’s $3 billion stock purchase, Berkshire Hathaway disclosed another purchase. This time, the firm is adding another $1.5 billion in OXY stock to its portfolio. This adds up to about 27.1 million shares of the company. Following this latest transaction, Berkshire Hathaway now has a total of about 118.3 million OXY common shares. Additionally, the firm also has warrants granting the right to acquire an additional 83.9 million common shares at $59.62 each.
Overall, Buffett’s play comes at a time when the company’s shares are taking center stage. Between the Ukraine-Russia war and global energy supply constraints, this would all be understandable. Also, with Russia, one of the biggest exporters of oil worldwide out of the picture now, oil prices would continue to be on the higher end. Even as the hype around the top oil stocks continues to simmer down, some are still posting solid gains. Evidently, OXY stock is currently up by a whopping 86% year-to-date. Seeing as Buffett appears to be optimistic on Occidental’s fundamentals, investors could be keen to follow suit today.
Fertilizer Prices Surge To Fresh Highs, Growing Concerns Over Further Food Inflation
Speaking of global supply chain woes, the price of fertilizers continues to rise as well. This appears to be the case following an uprooting of Russia’s sizable fertilizer trade. The likes of which stem from a combination of global sanctions alongside self-imposed sanctions on Russia’s end. In a recent report from Bloomberg, two key fertilizer price indexes are showing alarming figures. Namely, the Green Markets North American Fertilizer (GMNAF) index and a key potash index in Brazil indicate that prices are now skyrocketing to record highs across the board. Alongside oil, supplies for other Russia-sourced key commodities such as fertilizers continue to dwindle.
To deal with this, the likes of Brazil are now looking to make changes to its sanctions on Russia. In detail, Brazil is a major agriculture exporter. What this means is that it primarily imports most of its agricultural materials. In fact, the country currently imports about 85% of its fertilizers, and Russia is among its primary suppliers. To help with the current situation, Brazil is reportedly looking to exclude crop nutrients from any sanctions imposed on Russia on its end. As a result of all this, North American fertilizer firms continue to gain traction in the stock market now. This includes notable names such as Mosaic (NYSE: MOS), Intrepid Potash (NYSE: IPI), CF Industries (NYSE: CF), Nutrien (NYSE: NTR), and CVR Partners (NYSE: UAN).
JD.com To Acquire Deppon Logistics Via $1.4 Billion Deal
Elsewhere, Chinese e-commerce titan JD.com (NASDAQ: JD) is making a move on the acquisition front now. According to the press release, JD is acquiring Deppon Logistics for about $1.42 billion. For the most part, this would be a strategic play by the firm as it continues to grow its active users. Ideally, the current purchase serves to significantly bolster JD’s network infrastructure and delivery services. Through the current deal, JD’s logistic arm will be acquiring a 99.99% equity stake in Deppon Holdco. The likes of which own a majority stake in Deppon Logistics. In turn, this will lead to the launching of a mandatory general offer for all of Deppon shares at $2.07 each.
Speaking on the current acquisition is JD.com. The firm notes that Deppon is “an integrated, customer-centered logistics company providing a wide range of solutions including less than truckload transportation, full truckload transportation, delivery services, and warehousing management in China.” For a sense of scale, Deppon currently operates via over 30,000 service stations across China. Furthermore, it also has 143 transfer centers with over 1.8 million square meters in space alongside a fleet of 15,000 vehicles.
On top of this impressive buy, investors may also be tuning in to JD stock alongside its Chinese peers now. This comes as Shenzhen, China’s equivalent of Silicon Valley, is going into a shutdown after a coronavirus outbreak. Tech companies such as Foxconn are halting production and the already battered group of Chinese tech stocks remains under pressure. Nevertheless, despite all of this, JD continues to power forward on the operational front. As such, JD stock could be in focus in the stock market today.
SoftBank Unloads $1.04 Billion Of Coupang Stock
At the same time, Korean e-commerce firm Coupang (NYSE: CPNG) could be coming under fire now. In general, this could be due to Japan’s SoftBank selling off more of its notable stake in the company. Over the weekend, news broke of SoftBank’s Vision Fund selling 50 million shares of Coupang. The stake, at the time of the sale, was worth about $1.04 billion at about $20.87 a piece. In spite of the current sale, SoftBank remains Coupang’s biggest shareholder at about 461.2 million shares following the sale.
All in all, this announcement comes at a tricky time for Coupang as the company’s shares are already on the decline. This slide follows a report from Goldman Sachs (NYSE: GS) last week. According to the report, the bank is now marketing a block sale of 50 million CPNG stock. With Coupang currently trading at almost half of its IPO price of $35, CPNG stock could be turning some heads. It remains to be seen whether the supposed “Amazon of South Korea” has room to recover moving forward.