Coffee With Greta: Musk Takes Stake in Twitter
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DJIA Futures: +23 (+0.1%)
SPX Futures: +9 (+0.2%)
NASDAQ Futures: +52 (+0.4%)
Good morning friends!
Futures are slightly higher as the market gears up for a new week of trade focused on the Fed.
Let’s get right to it!
Musk Takes Stake in Twitter
Twitter (TWTR) shares are surging 19.5% ahead of the open after a new SEC filing revealed Tesla (TSLA) CEO Elon Musk purchased a big stake in the company.
The filing shows Musk owns 73,486,938 TWTR shares, which represents a 9.2% stake in the company.
At Friday’s closing price, that stake is worth $2.89 billion.
This makes Musk the largest outside shareholder in the stock.
The purchase comes after he criticized Twitter in a series of tweets a couple weeks ago.
He ran a poll questioning if the site adheres to free speech principles.
Free speech is essential to a functioning democracy.
Do you believe Twitter rigorously adheres to this principle?
— Elon Musk (@elonmusk) March 25, 2022
Musk also said he was giving “serious thought” to building a new social media platform.
Tesla Unveils Q1 Deliveries
Tesla (TSLA) shares are up 0.8% in premarket trade after the electric automaker unveiled Q1 delivery and production numbers.
The company said it delivered 310,048 vehicles in the first 3 months of the year while production totaled 305,407.
Model 3 and Model Y vehicles made up 295,324 of those deliveries.
Tesla said it struggled with “ongoing supply chain challenges and factory shutdowns” during the quarter.
The company was unable to resume production at its factory in Shanghai as planned today.
Reuters reported an internal notice to employees told workers and suppliers that work would not resume today.
Tesla did not tell employees when they expect to reopen.
The factory has been closed since March 28 when China put Shanghai under lockdown due to a new Covid outbreak.
Tesla manufacturers 6,000 Model 3 and 10,000 Model Y vehicles per week at the Shanghai factory.
Starbucks Suspends Share Buybacks
Starbucks (SBUX) shares are falling 2.9% ahead of the open after the company announced it’s suspending stock buybacks.
Today is chairman Howard Schultz’s first day as interim CEO as the coffee chain looks for a permanent replacement for Kevin Johnson.
In a statement, Schultz said, “This decision will allow us to invest more profit into our people and our stores — the only way to create long-term value for all stakeholders”.
In October, Starbucks committed to spending $20 billion over the next three years on buybacks and dividends.
Treasury Yield Curve Inversion
The market’s recession alarm bells are going off as a key part of the Treasury yield curve remains inverted.
The yield on the 2-year Treasury note is 2.42% while the 10-year yield is 2.39%.
That spread has been negative since late Thursday.
The inversion comes as traders turn their focus to the Fed minutes which are set to be released Wednesday.
The market is hoping that readout of the March meeting will provide more clarity on the bank’s plans to tackle inflation.
The spread between the 5-year Treasury note and 30-year Treasury bond is also negative.
The 5-year yield is 2.53% while the 30-year yield is 2.46%.
The inversion is not a guarantee of an impending recession but the 2-year/10-year curve has inverted before every major recession since 1955.
Oil Prices Rebound
Oil prices are rising today as the U.S. reserve release failed to alleviate supply concerns.
West Texas Intermediate crude futures are up 2.3% to over $101 per barrel while Brent crude futures are up 1.9% to over $106 per barrel.
The rally comes as several European leaders call for more sanctions against Russia.
Talks have also been paused between the U.S. and Iran to revive the Iran nuclear deal.
Meantime the UN brokered a two-month truce in Yemen between a Saudi-led coalition and the Houthi rebel group after recent Houthi attacks on Saudi oil facilities.
Factory Orders Preview
The Commerce Department reports factory orders for February at 10:00 a.m. ET.
That data is expected to show a decline of 0.6% after orders jumped 1.4% in January.
U.S. manufacturers have struggled with worsening supply chain issues and rising costs.
In Case You Missed It
- The March jobs report showed the U.S. economy added 431,000 jobs last month vs expectations for 490,000. The unemployment rate fell to 3.6% from 3.8% as the labor market nears full employment. But the labor force participation rate rose just 0.1% to 62.4%, down a full point from pre-pandemic levels. Average hourly wages rose 0.4% monthly and 5.6% annually, those gains are continuing to lag behind inflation.
