Here are five things you should know for Wednesday, June 1st:
1. – The edge of stock futures is higher, but inflation anxiety remains
US stock futures rose slightly on Wednesday, while the dollar extended gains against its global peers, as markets continue to gauge the impact of rising inflation on global growth prospects and question the ability of central banks to tame it.
President Joe Biden met Federal Reserve Chairman Jerome Powell at the White House yesterday, in fact, to chart a course for the world’s largest economy out of the inflation trap, which is undermining consumer confidence and squeezing discretionary budgets.
Biden pledged to “respect the independence of the Fed” but messages from the meeting – including photos from the Oval Office – left observers in doubt about the importance of inflation to both the president’s economic agenda and the prospects for the Democrats’ midterm elections. In November.
Meanwhile, data from Europe showed another slowdown in manufacturing activity last month, as rising input costs, supply chain disruptions and sagging demand led to the region’s most important economic driver.
European shares were slightly lower as a result, with the Stoxx 600 down 0.27% in early Frankfurt trading after a 0.5% drop for the former MSCI Japan’s area-wide index in overnight trade.
Here in the US, investors will be looking at the Bank of Canada rate decision at 10:00 AM ET as the central bank looks to slow inflation and an overheating housing market, before a planned rate hike from the Federal Reserve later. This month.
On Wall Street, futures linked to the Dow Jones Industrial Average are pointing up 115 points at the opening bell while those linked to the S&P 500 are priced at 2 points. Futures related to the technology-focused Nasdaq are indicating a 30-point lower opening bell.
2. – The Fed begins “quantitative tightening” with the return of the balance sheet
The Federal Reserve will begin deploying one of its more powerful, but less well-known, tools to combat inflation on Tuesday as the central bank begins the slow reduction of its $9 trillion balance sheet.
The Fed will begin selling about $47.5 billion worth of Treasuries and mortgage-backed securities each month, for the next three months, as part of its overall strategy to add upward pressure on market interest rates and slow demand in the world’s largest economy.
However, the pace of those sales will accelerate further to around $95 billion a month by September, putting the Fed on course to dump $3 trillion in securities in the market over three years — a rate more than double the rate. The last time the Federal Reserve started so-called “quantitative tightening” was in 2018.
Combined with the Fed’s planned rate hikes, which Chairman Jerome Powell said will likely include a 50 basis point increase over the next policy meetings in June and July, asset sales represent the central bank’s most significant tightening in a generation.
3. – Salesforce shares rise after first quarter earnings, profit expectations increase
sales force (CR) – Get a Salesforce, Inc. report. Shares jumped higher in pre-market trading after enterprise software group posted stronger-than-expected first-quarter earnings and boosted its near-term earnings forecast.
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Salesforce said it expects full-year earnings in the region of $4.75 per share, about 12 cents ahead of its previous estimates, after non-GAAP earnings of 98 cents per share for the three months ending in April with demand for streaming solutions. the work. , particularly from companies looking to integrate hybrid business, continues to grow.
The company said group revenue rose 24% to $7.41 billion, but noted that foreign currency headwinds, thanks to the strongest U.S. dollars in two decades, were likely to keep full-year revenue muted at $31.8 billion.
“While there is uncertainty in the macro environment, our customers continue to come to Salesforce to transform their business,” said Chief Financial Officer Amy Weaver. “The demand we see from our customers is a testament to the strength of these strategic relationships and the importance of our product range.”
“This gives us confidence in the robustness of our business model, and we are excited to help our customers navigate this changing economy,” she added.
Salesforce shares are up 8.4% in pre-market trading to indicate an opening bell price of $173.50 per share.
4. – Pfizer to exit healthcare consumer venture with GlaxoSmithKline
Pfizer (PFE) – Get a Pfizer Inc. report. Shares rose in pre-market trading after the drug group said it would exit its consumer health joint venture with Britain’s GlaxoSmithKline. (GSK) – Get a GlaxoSmithKline Plc report.
GSK said it plans to list Haleon, which hosts home health care brands such as Advil and Sensodyne, on both the London Stock Exchange and the New York Stock Exchange over the coming months, noting that Pfizer, which has a 32% stake in the division, will get out of its grasp “in a way”. disciplined”.
The separate bid may also provide cover for Glaxo’s high-risk CEO, Emma Walmsley, who has faced a long campaign of pressure from activist investors in Elliot Management.
Pfizer shares were up 0.11% in premarket trading to indicate an opening bell price of $53.10 per share.
5. – Elon Musk weighs when working from home
Tesla CEO Elon Musk, who has shared his views on everything from the war in Ukraine to the bitter court battle between Johnny Depp and Amber Heard in recent weeks, has now focused on work-from-home trends last night at his soon-to-be privately-owned Twitter (TWTR) – Get a Twitter, Inc. report. the account.
Musk, who leads a handful of companies and apparently works around the clock, claimed last night that he had asked Tesla executives to work “at least forty hours a week” at the company’s offices or “have to pretend to work elsewhere.”
Musk added that the obligation to work should take place at “Tesla’s main office, not a remote branch office unrelated to the duties of the job, for example being responsible for human relations for the Fremont plant, but having your office in another state.”
Tesla shares are down 1.1% in pre-market trading to indicate an opening bell price of $750.22 per share, a move that would extend their year-to-date decline to about 38%.
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