Here are five things you must know for Tuesday, April 19:
1. -- Stock Futures Move Lower Amid Hawkish Fed, Russia-Ukraine Resurgence
U.S. equity futures edged lower Tuesday, while the dollar held gains and Treasury bond yields bumped higher, as investors reacted to hawkish comments from an influential Federal Reserve President, a resurgence in fighting in eastern Ukraine and the start of a wave of corporate earnings reports on Wall Street.
Federal Reserve Bank of St. Louis President James Bullard told an event in Washington Monday that he wouldn't "rule out" a 75 basis point rate hike in any of the central bank's upcoming meetings, adding that he'd like to see faster moves from his colleagues in order to tamp-down the inflationary pressures building in the world's biggest economy.
While not his "base case", Bullard's comments nonetheless lifted bets on the Fed's policy path, with the CME Group's FedWatch tool now pricing in a 91% chance of a 50 basis point increase next month, with a 62% chance of a similarly-sized moved in June.
Russia's sudden re-grouping of troops and tanks in the Donbas region of eastern Ukraine has also unsettled markets, as reports suggest a renewed push into the front established by Ukrainian soldiers early last month that would make a worrying escalation of the nearly two-month long conflict.
Europe's Stoxx 600 was marked 0.8% lower in early trading in Frankfurt as investors returned from the region's four-day Eastern holiday celebrations, while stocks in Asia were marked 0.4% lower in the session amid concern over the Covid-triggered weakness in China. Japan's Nikkei 225 posted a 0.7% gain as the yen printed a fresh 20-year low of 128.42 against the dollar.
In U.S. markets, benchmark 10-year Treasury note yields nudged higher, to just under 2.9%, while the dollar index was little-changed at 100.741 against a basket of six major global currencies.
Stock futures were modestly lower, with contracts tied to the Dow Jones Industrial Average indicating a modest 50 point opening bell decline and those linked to the S&P 500 priced for a 10 point pullback. Higher yields were again pressuring tech stocks, with the Nasdaq called 50 points lower at the start of trading.
2. -- Twitter Shares In Focus As Private Equity Buyers Circle Social Media Group
Twitter (TWTR) shares moved lower in pre-market trading as investors looked to reports of potential takeover interest in the social media group from private equity firms as billionaire Elon Musk continues his attack on the board.
Multiple media reports suggest that Apollo Global Management has expressed willingness to use its credit investment platform to support any move to buy the micro-blogging website, including Musk's unsolicited $43 billion take-private proposal.
Musk, for his part, has stepped-up his criticism of the Twitter board, indicating he would essentially eliminate it by reducing its compensation to "zero", a move he claims would save $3 million a year. Twitter's board received $18 million in stock and salary compensation in 2020.
Twitter shares were marked 1.2% lower in pre-market trading to indicate an opening bell price of $47.88 e.
3. -- U.S. Airline Shares Bump Higher After Mask Mandate Struck-Down By Federal Judge
U.S. Airline shares edged higher in pre-market trading after most major carriers dropped their in-flight mask mandates late Monday following a ruling from a Federal judge in Florida.
U.S. District Judge Kathryn Kimball Mizelle said the 14-month old mandate, established by the Centers for Disease Control as well as the U.S. Department of Transportation, was unlawful in a case filed by a non-profit interest group called Health Freedom Defense Fund.
United Airlines (UAL) reacted first, eliminating its own mandate to wear masks on planes, with rivals American Airlines (AAL), Southwest Airlines (LUV) and Delta Air Lines (DAL), quickly following suit with immediate suspensions of their own mandates.
“We are relieved to see the U.S. mask mandate lift to facilitate global travel as Covid-19 has transitioned to an ordinary seasonal virus,” Delta said in a statement.
United shares were marked 0.2% higher in pre-market trading to indicate an opening bell price of $44.05 each while Delta rose 0.65% to $42.40 Southwest gained 0.3% to $46.39 each..
4. -- Netflix Shares Edge Lower Ahead of Key First Quarter Earnings
Netflix (NFLX) shares edged lower in pre-market trading ahead of the online streaming group's first quarter earnings report after the close of trading Tuesday, with investors focused on its near-term outlook for customer additions and content spending.
Analysts are looking for a bottom line of $2.89 per share from Netflix, with revenues in the region of $7.93 billion for the three months ending in March. The group also likely added 2.6 million new subscribers to its global service, a sharp decline from the 8.28 million tally over the final three months of last year.
Looking into the current quarter, new shows such as "Stranger Things" and "Ozark" could ignite subscriber growth, but forecasts remain welded to around 2.7 million, a figure that is unlikely to add to concerns that free cash flow generation can remain positive as content spending accelerates in order to take on rivals such as Disney+ and HBO Max.
Netflix shares were marked 0.55% lower in pre-market trading to indicate an opening bell price of $336.00 each, a move that would extend the stock's year-to-date slump to around 44%.
5. -- Amazon Workers In New Jersey Seek Union Vote
Amazon (AMZN) warehouse workers in Bayonne, New Jersey added their names to a small but growing list of employees seeking to form a union within the world's biggest online retailer, the U.S. National Labor Relations Board said late Monday.
The move follows a big union win in Staten Island, New York -- a first for Amazon's 1.5 million-strong workforce -- as well as a contested vote in fulfilment center in Bessemer, Alabama. Around a third of the 200 workers in the New Jersey facility, known as DNK5, submitted cards to join the International Brotherhood of the Trade Union local 713.
The NLRB has noted the baristas in more than 170 Starbucks (SBUX) locations have asked for certified union elections this year, with at least 10 having voted in favor of joining. Overall requests for unionization were up 57% from last year over the six months ending in March, the NLRB said last week.
Amazon shares were marked 0.5% lower in pre-market trading to indicate an opening bell price of $3,040.00 each.
