Here are five things you must know on Tuesday, May 31:
1. — Inflation worries resurface, stock futures lower
U.S. stock futures were lower on Tuesday as investors headed into the last trading day of the month on concerns that the world’s central banks have failed to tackle a historic inflationary run that continues to weigh on returns in major world markets and slowing economic growth.
European inflation hit a new high of 8.3 percent in May, data from the region’s statistics office showed on Tuesday, after German data on Monday showed consumer prices rose at the fastest pace in more than 50 years.
The surge appears set to continue after European officials agreed to a plan that would limit Russia’s exports of about 90% of its crude to the region as part of broader sanctions related to the late February invasion of Ukraine.
Lingering inflationary pressures also prompted hawkish comments from Fed Governor Christopher Waller, who told a conference in Frankfurt on Monday that he saw “no sense” in easing from a 50 basis point rate hike, “Until we see a big drop in inflation” in the world’s largest economy.
Federal Reserve Chairman Jerome Powell is also scheduled to meet President Joe Biden at the White House on Tuesday to discuss inflation.
Taken together, Wall Street’s rally last week was the strongest in two months, while Bank of America’s Flow Show showed nearly $22 billion in inflows into U.S. equity funds, the highest level in more than 10 weeks.
The dollar index, a good gauge of global risk appetite, edged up 0.1% to 101.748 in overnight trade, while the yield on the benchmark 10-year Treasury note (inversely related to price) rose to 2.828%.
In overseas markets, European stocks softened on faster-than-expected inflation data, with the Stoxx 600 slipping 0.16% in Frankfurt morning trade, while the region-wide MSCI ex-Japan rose 0.87%, boosted by improved manufacturing data from China. Shanghai’s two-month-long coronavirus lockdown will end on June 1, reports said.
Going into Wall Street’s last trading day in May, futures tied to the Dow Jones Industrial Average opened 225 points lower, while futures tied to the S&P 500 were priced to drop 27 points. Futures tied to the tech-heavy Nasdaq are down 23.4% this year and are facing a 45-point opening loss.
2. — Week Ahead: Employment data in focus as incomes shrink
Jobs data will be in the spotlight on Wall Street this week, as investors look to Friday’s nonfarm payrolls report for key indicators of consumer strength and wages that could put additional pressure on rising inflation in the country.
Employers are expected to add 320,000 new jobs to the economy in May, down from 428,000 in April, and monthly wages will rise 0.4%. The data will be provided ahead of Thursday’s release of data from payroll provider ADP, which will also show how quickly and quickly Americans are willing to fill a near-record 11 million open jobs in the world’s largest economy.
The jobs data capped an otherwise quiet week on Wall Street with little economic data and just seven S&P 500 gains, including Salesforce CRM, HP Enterprises HPE and Lululemon Athletic LULU.
scroll to continue
First-quarter earnings rose 11.2% from last year to a total of $453.12 billion, but that growth is expected to slow to 5.4% in the three months to June, taking the stock-weighted total to $464 billion, Refinitv data showed. .
3. — Oil prices surge after EU agrees to ban shipping of Russian crude
Global oil prices extended recent gains on Tuesday after EU officials reached an agreement to ban all seaborne imports of Russian crude for the next six months.
The decision, made after weeks of political deals with Hungarian President Viktor Orban, will exclude the pipeline to Budapest but effectively cover 70 percent of Russia’s 2.3 million barrels a day of oil exports to the region. % to 80%.
“This move has supported prices. However, the market has had a month to digest a potential ban, so we suspect it has largely been priced in,” said Warren Patterson, head of commodity strategy at ING. “That was reflected in price action in early Asian trade this morning.”
WTI for July delivery, closely linked to U.S. natural gas prices, rose $2.01 from Friday’s close of $118.87 a barrel. The same-month Brent crude contract, the global pricing benchmark, was last up $1.93 at $123.60 a barrel.
In the U.S., gasoline prices hit another nominal record high on Tuesday, with the AAA showing a national average of $4.622 a gallon.
4. Tesla shares higher as Shanghai lockdown draws to a close
Shares of Tesla TSLA were higher in premarket trading after reports that the automaker’s main Shanghai plant was approaching pre-pandemic production levels as the city looked to end a two-month lockdown.
Gigafactory 3, best known for its Shanghai factory, will reach 70% of its pre-pandemic weekly production of about 2,600 vehicles this week, Reuters reported on Tuesday, citing a company memo. The 22-day shutdown, along with continued delays related to the Shanghai lockdown, will weigh on deliveries in the second quarter, however, Jefferies analyst Philippe Houchois forecasts global deliveries of 275,000 vehicles, up from a record first quarter 310,000 vehicles fell 11.3%.
Tesla shares rose 1.5% in premarket trading, opening at $770.84 a share.
5.– AMC stock leaps as Top Gun: Mavericks record record Memorial Day weekend
AMC Entertainment Shares of AMC were higher in premarket trading after Paramount’s blockbuster “Top Gun: Maverick” film had a record launch event on Memorial Day weekend.
Top Gun, starring Tom Cruise for his iconic role as Navy fighter pilot Pete “The Maverick” Mitchell in 1986, earned more than $153 million over a four-day weekend, Comscore data showed Monday. Both figures surpassed the previous record. Pirates of the Caribbean: At World’s End shattered industry forecasts in 2007.
AMC stock rose 3.05% in premarket trading, indicating an opening price of $14.87 a share.