Coffee With Greta: Inflation Week Begins
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DJIA Futures: -149 (-0.4%)
SPX Futures: -33 (-0.7%)
NASDAQ Futures: -175 (-1.2%)
Good morning friends!
Futures are lower as the market gets ready for a new week of trade focused on inflation and earnings.
Let’s get right to it!
Inflation Week Begins
Traders are gearing up for a big week of economic data and the start of Q1 earnings season.
All eyes are on Tuesday morning, with the Labor Department set to release the March Consumer Price Index.
That’s expected to show inflation surged to an 8.4% annualized rate last month, with the Core CPI jumping 6.6%.
The Producer Price Index will be released Wednesday morning and then retail sales Thursday morning.
The Q1 earnings season “unofficially” begins with JPMorgan Chase (JPM) Wednesday morning.
Other key earnings reports this week include Delta Airlines (DAL), Wells Fargo (WFC), Morgan Stanley (MS), Goldman Sachs (GS), and Citigroup (C).
Elon Musk Snubs Twitter Board
Twitter (TWTR) shares are down 3.6% ahead of the open after the company’s CEO announced Elon Musk will not join the board of directors after all.
In a tweet, Parag Agrawal said “Elon has decided not to join our board”.
Elon has decided not to join our board. I sent a brief note to the company, sharing with you all here. pic.twitter.com/lfrXACavvk
— Parag Agrawal (@paraga) April 11, 2022
Agrawal included a note he sent to the company which said, “We have and will always value input from our shareholders whether they are on the Board or not. Elon is our biggest shareholder and we will remain open to his input.”
It’s unclear what Musk now plans to do with his stake or whether he will purchase more shares of the company.
Shopify Plans 10-for-1 Stock Split
Shopify (SHOP) shares are up 2.1% in premarket trade after the ecommerce start-up announced plans for a stock split.
The company proposed a 10-for-1 split of both the Class A and Class B shares.
That plan must be approved by at least two-thirds of shareholders and the split would take effect after the close on June 28.
Shopify is also requesting a “founder share” for CEO Tobi Lutke.
That plan would issue a new class of non-transferable founder shares to Lutke.
When combined with his existing Class B shares, that move would give him 40% voting power.
Nio Raises Prices, Suspends Production
NIO (NIO) shares are tumbling 10% ahead of the open after the Chinese electric automaker announced new price hikes and production delays.
The company raised the price for its three SUVs by 10,000 yuan, effective May 10.
Nio blamed the price hikes on rising material costs with the CEO saying, “We have no alternative but to raise prices. Please be understanding.”
The automaker also suspended production due to new Covid restrictions in China impacting its suppliers.
JetBlue Cuts Down Summer Flight Schedule
JetBlue (JBLU) shares are up 0.7% in premarket trade after the airline informed staff it’s planning to trim its summer schedule.
In an email to employees Saturday, JetBlue’s COO and president said “We’ve already reduced May capacity 8-10% and you can expect to see a similar size capacity pull for the remainder of the summer”.
The company canceled more than 300 flights over the weekend.
The schedule announcement comes after the airline offered its flight attendants $1,000 bonuses for the spring travel season.
Flight attendants are eligible for that bonus if they do not call out sick between April 8 and May 31.
U.S. airlines have struggled with severe staffing shortages following the pandemic.
Oil Extends Slide
Oil prices are still sliding on plans for a major global reserve release and demand concerns caused by Covid lockdowns in China.
West Texas Intermediate crude futures are down 4.3% to $94 per barrel while Brent crude futures are down 4% to over $98 per barrel.
The drop comes as the 240 million barrel release announced by IEA member nations and the U.S. is expected to ease market pressures over the next few months.
The release will equal about 1.3 million barrels per day, offsetting the shortfall of 1 million barrels per day of Russian oil.
But the EU is still considering a possible ban of Russian oil, which would create a more severe gap in supply.
Treasury Yields Extend Rally
The 10-year Treasury yield hit a fresh 3-year high over the weekend as the market gets ready for key inflation data this week.
The yield is currently up 10 basis points to 2.76% after topping 2.77% Sunday evening.
The recent spike in yields comes as the market prepares for the Fed to get more aggressive on inflation at upcoming meetings.
Fed Governor Michelle Bowman is set to speak at 9:30 a.m. ET.
NY Fed Inflation Expectations
The New York Fed releases its March Survey of Consumer Expectations at 11:00 a.m. ET.
The survey includes consumer forecasts for inflation in 1-year and 3-years.
In February, consumers expected inflation to remain at 6% 1-year from now and 3.8% 3-years from now.
