CNBC THURSDAY, MAY 12, 2022 (catching up)
U.S. stock futures dropped Thursday as the broad sell-off and revaluation of risk assets continued with little place to hide. Confirmation on somewhat moderating inflation did not move the needle. The Dow, the S&P 500 and the Nasdaq on Wednesday fell 1%, more than 1.6% and nearly 3.2%, respectively, as multiday losses mounted. (CNBC)
The producer price index, this week's second major inflation report, rose 0.5% in April, as expected. The core rate, which excludes food and energy prices, gained a less-than-expected 0.4%. Year-over-year, April PPI was up 11% and core was up 8.8%. On Wednesday, April consumer prices logged another strong advance, albeit at a slightly slower rate. (CNBC)
A read on the second pillar of the Federal Reserve's dual mandate of fostering price stability and maximum employment was also out before the opening bell Thursday. Initial jobless claims for the week ended May 7 rose slightly to 203,000. Estimates had called for fewer first-time claims for last week. While lower early Thursday, bond yields have been rising to multiyear highs. (CNBC)
IN THE NEWS TODAY
Shares of Disney (DIS) initially rose in after-hours trading following earnings Wednesday. But they quickly turned lower after the company's CFO acknowledged that the second half of the year may not be quite as strong relative to the first half when it comes to streaming. Disney+ ended its fiscal second quarter with 137.7 million subscribers, up 7.9 million from a year ago and better than estimates. (CNBC)
Disney's fiscal second-quarter revenue rose 23% to to $19.25 billion, helped by strong theme park sales. Revenue would have been $1 billion higher, if not for the early termination of some licensing agreements to make more content available for streaming. Disney reported adjusted earnings of $1.08 per share. (CNBC)
Also working against market bulls, Ford (F) and General Motors (GM) both fell sharply in the premarket. Wells Fargo downgraded both stocks two notches to underweight from overweight, saying 2022 could be "peak profits" for legacy automakers. Apple (AAPL), recently slumping with the rest of the market, has been dethroned as the world's most valuable company by oil giant Saudi Aramco. (CNBC)
Bitcoin slipped at one stage to below $27,000 on Thursday for the first time in more than 16 months, as the cryptocurrency market extended its losses, in part, on fears over rising inflation. Bitcoin, touted as a store of value like gold by proponents, has been trading in tandem with tech stocks and the Nasdaq recently. The world's largest crypto has fallen 60% from its all-time high in November. (CNBC)
Tether, the world's largest stablecoin, broke below its $1 peg Thursday, adding to market concern after the downfall of stablecoin protocol Terra. TerraUSD, or UST, is also supposed to mirror the value of the dollar, but it plummeted to less than 30 cents Wednesday, shaking investor confidence in decentralized finance. TerraUSD was trading around 45 cents Thursday. (CNBC)
Beyond Meat (BYND) shares tumbled 25% in Thursday's premarket, the morning after the maker of plant-based meat alternatives reported a wider-than-expected quarterly loss and lower-than-expected revenue. The company blamed steeper discounts and cheaper prices for international consumers and the launch of the company's plant-based jerky, which weighed heavily on margins. (CNBC)
STOCKS TO WATCH
Tapestry (TPR) gained 2.9% in the premarket after the company behind the Coach and Kate Spade luxury brands reported an adjusted 51 cents per share quarterly profit, 10 cents above estimates. Tapestry did cut its outlook for the fiscal year ending in June, due in part to the impact of Covid-related shutdowns in China.
Six Flags (SIX) jumped 7.7% after Six Flags reported a smaller than expected loss, as well as revenue which exceeded Street forecasts. The results were helped by an increase in attendance and in spending per guest.
WeWork (WE) Surged 9.8% in the premarket following the release of its quarterly results. The office-sharing company reported revenue that exceeded its prior guidance, plus a quarterly loss that was 37% lower than in the prior quarter, as well as its best gross sales since the first quarter of 2020.
Sonos (SONO) rallied 6.8% in the premarket following its quarterly results. Sonos saw better than expected revenue amid continued high demand, although it did say growth might be impacted by ongoing supply chain issues.
Rivian Automotive (RIVN) jumped 5.3% in premarket action, despite a wider than expected quarterly loss and lower than expected revenue. The electric vehicle maker maintained its 2022 production forecast, saying it expected supply chain issues to ease later this year.
Lordstown Motors (RIDE) surged 15.9% in the premarket after the electric vehicle company completed a deal to sell various assets to contract manufacturer Foxconn. Lordstown will receive $260 million in proceeds from the deal.
Bumble (BMBL) shares jumped 9.8% in premarket trading after the dating-service operator reported quarterly results that exceeded analyst estimates. Bumble saw a 7.2% rise in paying users during the quarter, with a Covid-19 resurgence helping dating apps keep the users they gained during the pandemic.
CONTRIBUTORS
Matthew J. Belvedere
@Matt_Belvedere
Peter Schacknow
@peterschack
