Coffee With Greta: GameStop Splits!

DJIA Futures: +170 (+0.6%)

SPX Futures: +16 (+0.4%)

NASDAQ Futures: +49 (+0.4%)

Good morning friends!

Futures are up as the S&P 500 looks to extend its gains for the third straight day.

Let’s get right to it!

GameStop Rallies After Announcing Stock Split

GameStop (GME) shares are up 5.9% ahead of the open after the company announced a 4-for-1 stock split after hours on Wednesday.

The video game retailer said its board of directors approved the split.

Shareholders who own the stock before the close on July 18 will get three additional shares for each one they own.

The dividend will be distributed after trading closes on July 21 and GME will start trading at the split-adjusted price on July 22.

Samsung Earnings Guidance Boosts Chip Stocks

Chip stocks are rising in premarket trade after Samsung released better than expected Q2 earnings guidance. 

The VanEck Semiconductor ETF (SMH) is up 1.8% ahead of the open.

Samsung said today it expects Q2 revenue to rise 22% year-over-year with operating profit expected to grow 12%. 

The South Korean chipmaker will release detailed second-quarter results later this month. 

Weekly Jobless Claims Hit 6-Month High

Weekly jobless claims rose unexpectedly last week in a sign layoffs are increasing.

The Labor Department reported 235,000 Americans filed initial claims for unemployment benefits.

That was an increase of 4,000 from the previous week and the highest level since January. 

The 4-week moving average of new claims also rose to 232,500, a 6-month high as well.

Continuing claims also rose by 51,000 to 1.38 million in the week ending June 25.

U.S. Trade Deficit Shrinks in May

The U.S. trade deficit decreased in May to $85.5 billion. 

That was down 1.3% from April but higher than expectations for $84.9 billion.

It’s still the lowest trade gap so far this year after the deficit hit a record-high two months ago.

Exports rose 1.2% to a record $255.9 billion while imports rose 0.6% to $341.4 billion. 

Adjusted for inflation, the real goods deficit rose to $116.6 billion in May.

The lower trade deficit will be positive for GDP growth as the record-high gap in March was blamed for the contraction in Q1.

Treasury Yields Rise, Curve Remains Inverted

The curve between the 2-year and 10-year Treasury yields is still inverted, signaling a recession is on the horizon. 

The 2-year Treasury yield is up about 3 basis points to over 3% while the 10-year yield is up just over 1 basis point to 2.95%.

This part of the yield curve first inverted on March 31 and then again briefly in June. 

Yields are rising today after the Fed minutes on Wednesday showed the bank is leaning toward another 75 basis point hike this month. 

Oil Prices Rise

Oil prices are rebounding today after plunging on global recession fears Wednesday. 

West Texas Intermediate crude futures are up 1.1% at just under $100 bbl while Brent crude futures are up 0.7% at over $101 bbl.

Both closed at their lowest price since April 11 on Wednesday as recession fears overtook supply concerns. 

The Energy Information Administration reports U.S. crude and gas inventories at 11:00 a.m. ET today.

Analysts expect that report to show oil stockpiles fell by 1.2 million barrels in the week ending July 1 while gas inventories are expected to have dropped by 500,000 barrels.

The American Petroleum Institute reported a 3.8 million barrel increase in crude inventories and 1.8 million decrease in gasoline stockpiles on Wednesday.

Gas Prices Still Dropping

U.S. gas prices fell for the 22nd day in a row. 

AAA shows the national average for regular gas fell to $4.752/gal today. 

Diesel also fell by more than a cent overnight to $5.698/gal.

The sharp decline in oil prices is expected to continue pushing U.S. gas prices down. 

In Case You Missed It

• The number of available jobs is still outpacing workers by about 2 to 1. The Labor Department’s JOLTS shows there were 11.25 million job openings in May. That was down from 11.67 million in April but just 5.95 million unemployed workers were counted in May. The Great Resignation continued to slow with 4.27 million workers quitting their jobs in May.

• The Fed’s June meeting minutes show the bank is committed to lowering inflation even if it causes a recession. The Fed released those minutes on Wednesday afternoon, showing another 0.75% rate hike is on the table for the July meeting. FOMC members acknowledged that tighter policy will likely slow the pace of economic growth but they see inflation returning to 2% as “critical to achieving maximum employment on a sustained basis”.