Here are five things you must know for Thursday, March 31:
1. — Stock Futures Mixed Ahead of Inflation, Jobs Data
U.S. equity futures traded mixed Thursday, while oil prices tumbled and Treasury bond yields retreated, as investors looked to round out the worst quarterly performance for stocks since the start of the pandemic two years ago.
With the S&P 500 down 3.44% for the year-to-date, bond traders tracking moves in the U.S. Treasury yield curve that indicate potential recession and the White House reportedly considering an historic release from the Strategic Petroleum Reserve in order to tame record-high energy prices, market fundamentals — and the broader domestic economy — appear weak heading into final trading day of the first quarter.
The Atlanta Fed’s GDPNow forecasting tool suggests first quarter growth will slow to just under 1%, from its final fourth quarter pace of around 7%, as the Federal Reserve aggressively signals interest rate increases, and the reduction of its $9 trillion balance sheet, as it fights the fastest inflation in forty years.
A key reading of the Fed’s preferred inflation gauge, as well as weekly jobless claims data, will come before the start of trading, with the gap between 2-year and 10-year Treasury bond yields holding in modestly positive territory, at 3.3 basis points, following a brief inversion earlier this week.
In Europe, stocks drifted lower on the final trading day of the quarter as reports suggest Russian troops will re-focus their invasion of Ukraine on the southeast region of Donbas, where Moscow-backed separatists have held loose control since being installed by President Vladimir Putin in 2014.
On Wall Street, futures contracts tied to the Dow Jones Industrial Average indicating a 5 point opening bell decline while those linked the S&P 500, which is up 5.922% for the month, are priced for a 5 point gain . Futures linked to the tech-focused Nasdaq are looking at a 60 point opening bell advance.
2. — Oil Prices Slump As Reports Say Biden Prepping Biggest-Ever SPR Release
The White House is considering the biggest-ever release of crude from the nation’s Strategic Petroleum Reserve this week, multiple media outlets have reported, as President Joe Biden looks to dampen the impact of record high energy prices and the fastest domestic inflation rates in more than four decades.
Reports suggest the President is set to authorize the release of 180 million barrels from the SPR, spread over several months, in order to bring down global crude prices and ease the supply hit from Russia’s war on Ukraine.
The move would mark the third release from the SPR in six months, and the largest-ever from the nation’s emergency stockpile, which sits at the lowest levels since 2002, according to Energy Department data published Wednesday.
WTI crude futures for May delivery were marked $5.69 lower from Wednesday’s close at $102.13 per barrel in overnight trading, while Brent contracts for the same month, the global pricing benchmark, fell $4.87 to trade at $108.58 per barrel.
3. — Tesla Shares Higher As Shanghai Closures Extend to April 2
Tesla (TSLA) – Get Tesla Inc Report shares edged higher in pre-market trading even as reports suggest the clean-energy carmaker will likely extend the closure of its Shanghai gigafactory as China’s biggest city remains on Covid lockdown.
An internal memo suggests Tesla, which closed the Shanghai plant on Monday as the city entered an extraordinary lockdown amid a resurgence in Covid infections, won’t resume production until at least April 3
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Tesla sold around 116,360 China-made cars over the first two months of the year, according to official trade data, most of which were bound for export to markets in Europe and Asia.
Tesla will post its first quarter delivery figures tomorrow or Saturday, with earnings for the three months ending in March slated for publication on April 25.
Early indications suggest analyst are looking for revenues in the region of $17.57 billion, up 68.3% from last year and profits of around $2.24 per share.
Tesla shares were marked 0.55% higher in pre-market trading to indicate an opening bell price of $1,100 each.
4. — UiPath Shares Plunge After Q4 Loss, Guidance Cut
UiPath, which specializes in robotics software, said its loss for the three months ending in January came in at 12 cents per share, with revenues rising 39% to $289.7 million. Looking into the current financial year, the group said it sees sales in the region of $1.075 billion to $1.085 billion, but noted the first quarter revenues would fall to $224 million, citing risks linked to Russia’s invasion of Ukraine.
I can tell you firsthand, this war is having a profound impact on the sense of physical and economic security across the continent and in the U.K.,” CEO Daniel Dines told investors on a conference call late Wednesday. “We are also starting to hear customers in the U.S. express reservations about both political uncertainty and rising interest rates.”
“As we start the fiscal year, we believe it is prudent to guide assuming the uncertainty we are seeing in the first quarter will continue,” he added.
UiPath shares were marked 14.3% lower in pre-market trading to indicate an opening bell price of $24.90 each.
5. — AMD Shares Slide on Barclays Downgrade, Price Target Cut
Barclays analysts Blayne Curtis lowered his rating on AMD to ‘equal weight’ from ‘overweight’, while cutting his price target on the group by around 22% to $115 per share, citing “cyclical risk across several end markets” looming in 2023.
“We don’t have a smoking gun pointing to a correction underway in any of these markets, but it’s very clear to us that all 3 segments (gaming, PC and ‘broad-based/XLNX’) are running at elevated levels,” Curtis said. “The core issue here is what will be AMD’s growth trajectory coming out of this potential correction and the answer to this will be just how competitive Intel and ARM will be in 2024/25.”
AMD said last month that 2022 revenues should come in north of $21.5 billion, a 30% increase from last that that is also well ahead of the Refinitiv forecast of $19.25 billion, thanks to surging demand for its data center chips.
AMD shares were marked 1.6% lower in pre-market trading to indicate an opening bell price of $117.31 each.