Five things you need to know before the market opens on Friday June 9.
1. -- Stock Futures Lower After S&P 500 Reclaims Bull Market
U.S. equity futures nudged lower Friday, while the dollar held firm against its global peers and Treasury yields steadied, as investors looked to consolidate yesterday's bull market move by the S&P 500 heading into a stern series of tests later next week.
The benchmark rose 26.4 points yesterday, lifting it to just under 4,294 points and marking a 20% gain from its recent October lows, a move that is generally considered a 'bull market' by investors and confirms the exit of its longest 'bear market' since 1948.
Dow Jones data suggests stocks typically perform well when entering a bull market, rising 2% in the following month and 9% over the following year.
This recent move is likely to be test quickly, however, as traders have kept the benchmark from rising past the 4,300 point level on multiple occasions this week, and will need to navigate a key inflation reading, a Federal Reserve rate decision and $220 billion in Treasury bill and bond issuance next week in a calendar bereft of corporate earnings.
Fed signaling continues to suggest the central bank will pause its rate hike cycle Wednesday in Washington, but futures traders are now pricing in a 67% chance it will resume increases when it meets again in July with either a 25 basis point (52.3%) or 50 basis point move (13.8) to the upside.
Benchmark 10-year note yields were marked at 3.749% in muted overnight trading, while 2-year paper changed hands at 4.554%. The U.S. dollar index was modestly higher against a basket of its global peers in overnight dealing, rising 0.18% to 103.511.
Market volatility was also in decline, with the CBOE Group's VIX index, a key market volatility gauge, falling 1.7% in overnight dealing to 13.7 points, the lowest in more than three years. That level suggests traders are expecting daily moves in the range of around 36 points over the next month.
On Wall Street, stocks are looking to open modestly lower to close out the week, with futures contracts tied to the S&P 500 indicating a 4 point opening bell decline and those linked to the Dow Jones Industrial Average priced for a 65 point move to the downside. The tech-focused Nasdaq is set to open around 5 points lower.
European stocks dipped modestly in the early session, with the Stoxx 600 falling 0.03% in Frankfurt, while Britain's FTSE 100 slipped 0.03% lower in London.
Overnight in Asia, the region-wide MSCI ex-Japan index rose 0.63% into the close of trading following the biggest decline in China's factory gate inflation in seven years, a move that likely increases the chances of further policy support from Beijing.
Japan's Nikkei 225, meanwhile, closed 1.87% higher at 32,265.17 points, after a monthly 'special quotation' of shares indicated a bullish outlook for futures and options traders.
2. -- Tesla Shares Jump After Opening Charging Network To General Motors
Tesla (TSLA) shares extended gains in pre-market trading, lifting the stock to its highest levels since September, after cutting a deal that allows General Motors (GM) to use its network of charging stations.
The partnership, which follows a similar deal with Ford Motor Co (F) last week, means all three U.S. automakers will now use the same network of 12,000 'fast chargers' that are based on the Tesla North American Charging Standard (TNACS).
GM said its cars will be made to fit the TNACS by 2025, with CEO Mary Barra saying the deal is likely to save the carmaker as much as $400 million
Tesla share were marked 4.55% higher in pre-market trading to indicate an opening bell price of $245.54 each. General Motors shares, meanwhile, jumped 3.5% to $37.10 each.
3. -- Carvana Shares Extend Gains As Bullish Profit Outlook Hammers Short Sellers
Carvana (CVNA) shares extended gains Friday, building on the stock's biggest single-day advance on record, following the used-car seller's bullish quarter profit forecast.
Carvana told investors Thursday that it expects adjusted profits for the second quarter of around $50 million, a figure that surprised Wall Street analysts, who were looking for a $6 million loss, with profits per unit, a key industry metric, rising to $6,000.
The outlook powered shares to a Thursday session gain of 56%, the largest on record, and caught a host of investors who were betting against the stock in a so-called 'short squeeze' that has them sitting on year-to-date losses of more than $1 billion.
Carvana shares were marked 5.3% higher in pre-market trading to indicate an opening bell price of $25.51 each.
4. -- DocuSign Shares Higher After Solid Q1 Earnings
DocuSign (DOCU) shares moved higher in pre-market trading after the online signature vending group posted stronger-than-expected first quarter earnings and boosted its near-term outlook.
DocuSign earned 72 cents per share over the three months ending in April, topping Street forecasts on a non-GAAP basis by around 20 cents per share. The group also notched a 12.3% gain in revenues, which hit $66.1 million, again topping analysts' forecasts of a $641.8 billion tally.
The group said full-year sales would likely rise to between $2.71 and $2.73 billion, thanks in part to an expanded partnership with Microsoft MSFT which will see the tech giant using DocuSign's products and services in its contract management workflows.
DocuSign shares were marked 58.12% lower in pre-market trading to indicate an opening bell price of $63.23 each.
5. -- Trump Indictment May Be Unsealed As Former President Protests Classified Documents Charges
The Department of Justice could unseal the indictment filed against President Donald Trump, the first of its kind if U.S. history, later today, following reports that the former President, and presumptive Republican nominee, has been charged with concealing classified documents at his home in Florida.
Trump told his followers on the Trust Social social media platform that he's slated to appear in federal court in Miami on Tuesday, and repeated his assertion that he is innocent of the charges being brought against him by the Special Council's office lead by longtime federal prosecutor Jack Smith.
“I never thought it possible that such a thing could happen to a former President of the United States,” Trump said.
Those charges, however, are unknown at this time, as the indictment brought against the former President remains under seal. Reports suggest, however, it includes charges linked to conspiracy and the willful retention of classified documents in violation of the Espionage Act.
Last august, investigators used subpoena power to seize some 13,000 documents from Trump's home in Palm Beach, Florida. Around 100 of those were deemed classified, despite his legal team's insistence that all top secret papers had been returned to the National Archives.
