Here are the most important news, trends and analyzes from which investors should start their trading day:
1. Futures are essentially equal after Wednesday’s declines
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, June 3, 2022.
Brendan McDermid Reuters
US stock futures were essentially flat on Thursday as the key message on Friday’s May inflation data moved on. Traders are also watching the European Central Bank’s latest interest rate decision on Thursday. Wall Street closed lower a day earlier. The S&P 500 fell 1.08% on Wednesday, while the Dow Jones Industrial Average and Nasdaq Composite lost 0.81% and 0.73%, respectively. The only sector in the S&P 500 that ended on Wednesday was energy, closing at its highest point in nearly eight years.
All three major US stock indexes broke a two-day series of gains on Wednesday as investors continued to monitor the bond market and seek new information on the trajectory of economic growth. The Dow is now essentially equal for the week and nearly 11% below its record high. The S&P 500 rose 0.18% a week so far and 14.6% from its peak in early January. Nasdaq is stable on the green for the week with an increase of 0.61%. However, the technology index is still fixed in the bear market, being more than 25% below its highest level in November.
2. 10-year transactions with yields over 3%; oil basically flat
The yield on the reference 10-year government securities remained above 3% on Thursday morning after jumping above this psychological level on Wednesday. US government bond prices, which are moving back against yields, fell this week. The yield on 10-year bonds ended last week at 2.941% and was only around 2.71% at the end of May. Equity investors are closely watching bond yields rise in 2022, as higher interest rates tend to put pressure on growth-oriented technology stocks, which have significant cash flows projected in the coming years.
Oil prices remained broadly flat on Thursday. US comparative crude oil West Texas Intermediate fell about 0.2% to about $ 121.90 a barrel. Brent crude oil, an international benchmark, was trading at $ 123.48 a barrel, just around the point where it ended on Wednesday when WTI and Brent reached their two-month high. The recent rise in oil prices has come as Covid’s reopening in China is expected to boost demand, while fears of supply elsewhere remain.
3. Tesla shares jump after UBS upgrade
Tesla store seen in Shanghai, China, February 1, 2022.
Costfoto | Future publishing house Getty Images
Tesla shares rose 3.5% in pre-market trading on Thursday after UBS upgraded the electric vehicle maker to purchase. Shares of Tesla fell harder this year, falling more than 30 percent so far to close on Wednesday. Despite this sharp withdrawal, UBS wrote to customers that it was “time to be brave” with the shares, adding that the company’s future is still very bright. Profits before the market for Tesla come after shares rose 1.25% on Wednesday on an otherwise weaker day for the S&P 500. Tesla has the sixth largest weight in the S&P 500.
4. Target increases the quarterly dividend
A man enters the Target store in Washington, DC, on May 18, 2022.
Stephanie Reynolds AFP | Getty Images
Target said on Thursday that its board of directors had approved a dividend increase. The quarterly payout will increase by 20% to $ 1.08 per ordinary share, compared to the previous level of 90 cents. The Minneapolis-based retailer is a member of the S&P 500 Dividend Aristocrats index, which consists of companies that have increased their dividends annually for the past 25 years; Target said 2022 will be the 51st consecutive year that this has been done. The announcement from Target on Thursday comes two days after the company warned that its profit for the second fiscal quarter will be reduced as it takes aggressive steps to get rid of excess stocks. The target shares, which fell by more than 30% during the year so far, rose by 0.76% in pre-market trading.
5. Apple’s subsidiary will provide loans for its Pay Later service
The Apple website shown on a laptop screen and the Apple logo shown on the phone in this illustrative photo.
Jakub Porzycki Nurfoto | Getty Images
Apple intends to use a wholly owned subsidiary to verify the loan and lend short-term loans to consumers on its new purchase now, pay for the service later. The iPhone maker announced the new offering on Monday when it launches its developer conference; it will be called Apple Pay Later and will be available later this year when new iPhone 16 software for iOS is released.
Additional details about Apple Pay Later reflect the technology giant’s ambitions in the fintech industry. While Goldman Sachs participates as a technical issuer of loans granted through Apple Pay Later, it is worth noting that Apple actually maintains credit decisions internally and uses its balance sheet to issue loans. Buy now, pay later in recent years are becoming increasingly popular. Startup companies like Affirm have made big enough waves to establish fintech companies like Square Parent Block have made deals to buy existing players, while PayPal has launched its own offer.
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