Stock Market Futures Rise Despite Growing Geopolitical Conflict In Ukraine
U.S. stock futures are marginally higher heading into the current trading week. This came after last Friday’s job report showing that the unemployment rate for March reached a new pandemic-era low of 3.6%. Elsewhere, the ongoing war between Ukraine and Russia continues. Ukrainian President Volodymyr Zelenskyy is now accusing Russian forces of committing genocide in the town of Bucha, citing 410 civilian casualties. Aside from rising geopolitical tensions, investors will also likely have the Fed on their minds for the week ahead. Accordingly, this is because the Federal Open Market Committee’s (FOMC’s) March 15-16 meeting minutes are due on Wednesday. As such, it would provide greater insight into how the central bank aims to adjust its monetary policy strategy going forward. This comes less than a month after the Fed raised interest rates for the first time since the pandemic began.
For investors looking to get a better read on how things could go, economists have plenty to say already. Among the latest names speaking on this is Brett Ryan, a senior U.S. economist from Deutsche Bank (NYSE: DB). Ryan writes, “We expect the Committee to unveil its finalized plan at the May 4 meeting (commencing in June), initially setting the monthly caps for maturing Treasuries and MBS that will not be reinvested at $20bn and $15bn per month, respectively.” Safe to say, the state of the economy and how the Fed aims to address it will remain key themes in the stock market this week. As of 6:11 a.m. ET, the Dow, S&P 500, and Nasdaq futures are trading higher by 0.05%, 0.18%, and 0.38% respectively.
Tesla Reports Quarterly Shipments; Posts Figures Slightly Shy Of Estimates
Over the weekend, Tesla (NASDAQ: TSLA) reported its latest quarterly delivery figures. Getting straight into it, the company is currently looking at deliveries of 310,048 vehicles during the quarter. For starters, this would be a commendable figure seeing as it marks a record-high for Tesla. Year-over-year, this adds up to a whopping 67.8% increase. Not to mention, this would also be the second record-setting quarter for Tesla in terms of deliveries. Even so, the company’s latest vehicle delivery figures are slightly below analyst estimates of about 317,000.
Nevertheless, this goes to show that Tesla remains a towering presence in the global electric vehicle (EV) scene now. However, it is important to note that Tesla, like most global businesses, continues to feel the pinch from global shortages. Overall, this is apparent seeing as the company’s output is down quarter-over-quarter. To be precise, Tesla built 305,407 vehicles in the first quarter. This is versus the 305,840 units it made in the previous quarter. In general, most would argue that the ongoing shortage in computer chips is still impacting automakers like Tesla.
Despite all of this, Tesla is pressing forward and continues to expand its operations. The most recent example of this would be the opening of its latest Gigafactory in Berlin just last month. Looking forward, Tesla is also planning to host its first fiscal quarter earnings on April 20, after the closing bell. With all this in mind, investors may be eyeing TSLA stock later today.
Novartis To Merge Pharmaceuticals And Oncology Divisions; Expects $1 Billion In Savings
On the health care front, Swiss multinational pharmaceutical firm Novartis (NYSE: NVS) is refining its business. In particular, the company is looking to integrate its pharmaceuticals and oncology divisions. According to Novartis, the new unit will be its innovative medicines (IM) business. By doing so, the company is hoping to simplify the overall structure of its operations. Notably, Novartis is currently estimating savings of about $1 billion by 2024 from this move. Aside from that, it is also projecting value creation through operational improvements, accounting for at least a 4% sales growth.
Providing an overview on all this is CEO Vas Narasimhan. He notes, “The simpler organizational model we are unveiling today is central to our growth strategy as it will make us more agile and competitive, enhance patient and customer orientation, unlock significant potential in our R&D pipeline and drive value-creation through operational efficiencies.” Additionally, Narasimhan also highlights Novartis’ growing portfolio of in-market medicines and its 20 major pipeline assets that could be approved by 2026. All of which he argues puts the company in a favorable position “to deliver above-peer-median sales and margin growth in the mid-and long-term.” After considering this piece of news, investors could be keen on NVS stock now.
General Motors To Receive Support From Canada For Multi-Billion-Dollar Facilities
In another piece of EV-related news, General Motors (NYSE: GM) is reportedly receiving support from the Canadian government today. According to Reuters sources, this will likely see multi-billion-dollar investments from the federal government and Ontario’s provincial government towards two of GM’s facilities in the region. Worth mentioning, according to the report, one of these facilities will be producing commercial EVs. All of this comes from an official announcement from Canada’s Minister of Innovation Francois-Philippe Champagne. According to the statement, the minister will announce “an important investment in the future of Canada’s automotive manufacturing sector” later today.
For one thing, this would be in line with GM’s plans to invest up to $799 million towards electrifying its production plants in Canada. Through which it aims to convert its CAMI Assembly Plant in Ontario to manufacture the GM BrightDrop EV600 electric delivery vans. With the global green wave driving demand for EVs higher, GM appears to be adapting accordingly. As a result, GM stock could be in focus at today’s opening bell.
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Oil Prices Rise As Supply Concerns Persist Despite Strategic Reserve Releases
Elsewhere, oil prices continue to experience volatility today. For the most part, this is due to a back and forth regarding the current global supply. On one hand, new releases from global oil reserves would serve to further lighten the pressure on shrinking gas supplies. As of last week, U.S. President Joe Biden is ordering the release of up to 1 million barrels per day to address rising U.S. oil prices. Furthermore, the President is also putting pressure on domestic oil firms to bolster their production efforts as well.
On the other hand, we also appear to be seeing persisting worries about tightening supplies. The likes of which are apparent as oil prices continue to gain this morning. According to data from Reuters, Brent crude futures were up by 9 cents to about $104.48 per barrel. At the same time, U.S. West Texas Intermediate crude gained by 3 cents, bringing it up to $99.30 a barrel. Regardless, some of the top oil stocks around continue to outpace the broader stock market. This is evident with companies such as Chevron (NYSE: CVX), ExxonMobil (NYSE: XOM), and Devon Energy (NYSE: DVN) holding on to year-to-date gains of over 30% now. As such, it would not surprise me to see the oil industry remaining a key focus in markets this week.