Here are five things you must know for Friday, April 8:
1. -- Stock Futures Nudge Higher As Stocks Defy Fed, War and Growth Uncertainty
U.S. equity futures traded higher Friday, following on from yesterday's late-session rally on Wall Street, as investors continue to bid-up stocks in the face of an array of market uncertainties, highlighted by the Federal Reserve's challenge to execute a soft landing for the world's largest economy.
Treasury bond yields were active again in overnight trading, taking 10-year notes to 2.683%, the highest since 2019, and pegging the gap over 2-year notes at around 16 basis points in a notable reversal of the 'inversion' seen earlier this week.
The Atlanta Fed's GDPNow tracker suggests the economy is growing at a modest 0.9% clip, while the CME Group's FedWatch tool suggests an 81% change of a 50 basis point rate hike next month and a 50/50 change of follow-on hikes at both the June and the July policy meetings that would take the Fed Fund rate to a range of 1.75% to 2% by mid-summer.
Whether those moves suggest a more bullish outlook on the economy remains to be seen: Russia's war on Ukraine continues to disrupt food and energy prices, China's Covid surge is extending delays in global supply chains, notably in the tech and auto sector, higher interest rates are slowing growth in the housing market and corporate earnings are set to slow markedly from the torrid post-pandemic rebound recorded last year.
Still, with the Fed pledging to reduce its $9 trillion balance sheet by $1 trillion a year, selling $95 billion in assets to the market each month, while moving to 'expeditiously' raise interest rates in order to arrest the fastest domestic inflation rates in forty years, stocks appear to be the best alternative at present in market of rising interest rates and extreme commodity price volatility.
On Wall Street, futures contacts tied to the Dow Jones Industrial Average indicating a modest 105 point opening bell decline while those linked the S&P 500, which is down 5.6% for the year, are priced for a 12.5 point bump to the upside. Futures linked to the tech-focused Nasdaq are looking at a 42 point opening bell gain.
2. -- Elon Musk Makes Big Promises For New Tesla Factory In Texas
Tesla (TSLA) shares edged higher in pre-market trading, after nudging in to positive territory for the year on last night's close, as CEO Elon Musk promised to deliver "massive scale full self-driving" during the opening of a new production facility in Austin, Texas.
In what Tesla called a 'Cyber Rodeo' celebration to mark the opening of 'Giga Texas', a $1.1 billion factory outside of Houston, which Musk said would be the highest volume car factory in the U.S.
He touted the first deliveries of the cheaper Model Y sport utility vehicle and said Giga Texas will ultimately produce the delayed Cybertruck, which is now expected to debut next year.
Musk also repeated his promise -- first made in 2019 -- that the U.S. will soon see its first fully-autonomous 'robotaxi', with a "futuristic look", although he didn't provide a specific time frame.
Tesla shares were marked 0.3% higher in pre-market trading to indicate and opening bell price of $1,060.19 each.
3. -- Amazon Disputes New York Union Vote; Labor Challenges Alabama Result
Amazon (AMZN) vowed to contest the recent union elections in its Staten Island, New York warehouse earlier this week, citing intimidation of staff members and intentional voting delays.
The world's biggest online retailer said that the Amazon Labor Union interfered in the vote, which took place over several days, and ask for extra time from the U.S. National Labor Relations Board in providing a challenge to its certification.
The decision to unionize, a first for Amazon's 1.5 million-strong workforce, was hailed by U.S. President Joe Biden, who said the workers had "made their choice to organize a grassroots union, bargain for better jobs and a better life."
A failed union vote at Amazon's fulfilment center in Bessemer, Alabama was also challenged by the Retail, Wholesale and Department Store Union, which alleged interference by Amazon.
Amazon shares were marked 0.45% higher in pre-market trading to indicate and opening bell price of $3,170.00 each.
4. -- Spirit Agrees To JetBlue Takeover Talks Despite Frontier Merger Agreement
Spirit Airlines (SAVE) shares moved higher in pre-market trading after the low-cost airline agreed to talks with JetBlue Airways (JBLU) on its unsolicited $3.6 billion takeover offer.
Spirit, which had been planning a $6.6 billion tie-up with low-cost rival Frontier Group Holdings (ULCC), said JetBlue's offer of $33 per share, which values the Miramar, Florida-based carrier at a 33% premium to the Frontier deal, could be a "superior proposal" that shareholders may need to consider.
JetBlue said its "looks forward to engaging with the Spirit Board to finalize our combination", adding it will create a "national low-fare challenger to the four large dominant U.S. carriers that will result in lower fares and better service for customers."
Spirit Airlines shares were marked 0.7% higher in pre-market trading to indicate an opening bell price of $$26.70 each while JetBlue gained 2.5% % to $12.08 each. Frontier was marked 2.5% higher at $10.70 each.
5. -- Twitter CEO Arranges 'Ask Me Anything' Meeting Between Elon Musk, Anxious Employees
Twitter (TWTR) shares slipped lower in pre-market trading after the social media group invited employees to a question-and-answer session with its newest board member, who also happens to be both its biggest shareholder and the world's richest man.
Elon Musk, who unveiled a 9.1% stake in the group -- now worth $3.5 billion -- earlier this week, has vowed to bring "significant" changes to the micro-blogging website as part of his agreement to serve on the board.
That promise has lead to reports of anxious employees at the group's San Francisco headquarters, as well as a move by CEO Parag Agrawal to arrange a so-called 'Ask Me Anything' session with the newest board member.
Twitter shares were marked 0.8% lower in pre-market trading to indicate an opening bell price of $47.60 each.
