Here are five things you need to know for Tuesday, May 25th:
1. Stock futures rise as inflation subsides
Stock futures traded higher on Tuesday as fears of rising inflation and its impact on the recovering US economy subsided.
The contracts linked to the Dow Jones Industrial Average rose 74 points, the S&P 500 futures rose 10 points and the Nasdaq futures rose 46 points.
Although concerns about persistent inflation have subsided, the recovering economy brings mounting pressure on prices and fears that the Federal Reserve may withdraw its extraordinary support.
But James Bullard, president of the St. Louis Federal Reserve Bank, said in an interview with Yahoo Finance that more inflation was “not really a surprise”.
He anticipates temporary price pressure from the economic recovery, but sees inflation rising above 2% this year and through 2022.
Bullard also said it was not time for the Fed to reconsider monetary policy.
“I think there will come a time when we can talk more about changing monetary policy parameters. I don’t think we should do this while we are still in the pandemic,” Bullard said.
Shares ended significantly higher on Monday as investors focused on the strength of the US economic recovery and put inflation concerns aside.
2. Tuesday Calendar: New Home Sales and Consumer Confidence
The Tuesday US Economic Calendar includes New Home Sales for April at 10 a.m. ET and Consumer Confidence for May at 10 a.m.
Earnings reports are expected from Toll Brothers on Tuesday ((TOLL) – Get the report, Nordstrom ((JWN) – Get the report, AutoZone ((AZO) – Get the report, Urban Outfitters ((URBN) – Get the report and Zscaler ((ZS) – Get the report.
3. – Amazon is about to buy MGM Studios
Amazon.com ((AMZN) – Get the report A purchase agreement for Metro-Goldwyn-Mayer Studios for nearly $ 9 billion, including debt, is reportedly imminent.
The Wall Street Journal quoted, citing people familiar with the matter, that an agreement for the Hollywood studio could be announced as early as this week if talks do not fall apart at the last minute. Bloomberg said the deal could be announced on Tuesday.
Amazon’s acquisition of MGM would be the second-largest acquisition after purchasing Whole Foods for $ 13.7 billion in 2017.
An acquisition of MGM, which has an extensive library of titles and is the company behind the “James Bond” franchise, would help strengthen Amazon’s Prime streaming service and better compete with Netflix ((NFLX) – Get the report and Walt Disney’s ((DIS) – Get the report Disney +.
Jim Cramer of MGM Studios reports: Amazon controls its own destiny
Amazon and Disney are equity interests in Jim Cramer’s Action Alerts PLUS member club. Would you like to be notified before Jim Cramer buys or sells the stock? Find out more now.
4. Lordstown Motors sinks after production plans are cut
Lordstown Motors ((HORSE RIDING) – Get the reportThe electric vehicle company fell more than 13% in premarket trading on Tuesday after it said production of its endurance truck in 2021 will be half of previous expectations and will need additional capital to execute on its plans.
The stock fell 13.75% to $ 8.34 early Tuesday.
“We backed up a number of critical parts and equipment in advance so we will still be able to increase endurance, but we need additional capital to execute our plans,” said Steve Burns, chairman and CEO, in a statement . “We believe we have multiple options for raising capital in different forms and we started these discussions.”
The company expects investments of $ 250 million to $ 275 million for the year and year-end liquidity of $ 50 million to $ 75 million, compared to previous expectations of at least $ 200 million.
Morgan Stanley analyst Adam Jonas cut his price target on the stock from $ 12 to $ 8.
5. – Elon Musk urges Bitcoin miners to make energy consumption more transparent
Bitcoin prices rose on Tuesday after Tesla ((TSLA) – Get the report CEO Elon Musk urged big Bitcoin miners to be transparent about their energy usage.
In a tweet, Musk said he held a meeting with top bitcoin miners in North America and asked them to post reports on renewable energy use and ask other mining companies to do the same.
Cryptocurrencies have had a very volatile month as tweets and statements from Musk continued, including one that stated the electric vehicle company would no longer accept payments in Bitcoin.
“If the market continues to fluctuate wildly from Elon Musk tweets, it will be a big blow for this asset class. The fact that a person sees such wild swings in tweets takes away the legitimacy of the asset class, ”said Matt Maley, chief marketing strategist at Miller Tobacco.
Bitcoin rose 0.2% to $ 37,076 early Tuesday, according to CoinDesk.