Business

What to Watch Today: Futures Turn Lower After Consumer Prices Remain at Four Decade Highs

Source: NYSE

BY THE NUMBERS

U.S. stock futures turned lower Wednesday after the first of two key April inflation reports this week showed consumer prices were still at 40-year highs. The data further raises concern that inflation will remain high as the economy slows. The producer price index for April is set release Thursday. (CNBC)

Wall Street saw a volatile session Tuesday, with the Dow Jones Industrial Average wiping out a 500-point gain, hitting a session-low down roughly 350 points before closing 84 points lower, a fourth straight down day. The S&P 500 and the Nasdaq were able to close higher, breaking three-session losing streaks. Dow stock Disney (DIS) is set to report earnings after Wednesday's closing bell. (CNBC)

IN THE NEWS TODAY

The 10-year Treasury yield popped back above 3% on Wednesday after the government's April consumer price index rose a stronger-than-expected 8.3% year over year. Removing volatile food and energy prices, so-called core CPI still rose a great-than-expected 6.2%. (CNBC)

Inflation has been the single biggest threat to a recovery that began early in the pandemic and saw the economy in 2021 stage its biggest single-year growth level since 1984. The big swings in financial markets recently reflect growing worries that the Federal Reserve continues to act too slowly to arrest the spike in inflation. (CNBC)

A source of inflation in the economy has been oil prices and in turn record-high gasoline prices. West Texas Intermediate crude, the American benchmark, rose about 3.5% to $103 per barrel Wednesday after back-to-back sharp declines. The downturn in the two prior sessions was driven by supply concerns as the European Union works to gain support for a Russian oil embargo. (Reuters)

Shares of Coinbase (COIN) sank 20% in Wednesday's premarket, the morning after the crypto exchange reported quarterly revenue dropped 27% to $1.17 billion, falling short of estimates. It also announced a quarterly loss of $1.98 per share. Coinbase noted a decline in users, with the digital currency market recently experiencing a major downturn. (CNBC)

A main token from embattled crypto project Terra is now in free fall. UST, a so-called stablecoin that's meant to maintain a 1-to-1 peg with the U.S. dollar plunged to as low as 31 cents Wednesday. Meanwhile, Bitcoin has lost more than 50% since its all-time high in November. It was lower again Wednesday, below $30,000. (CNBC)

STOCKS TO WATCH

Wendy's (WEN) reported adjusted profit of 17 cents per share, 1 cent below estimates, with revenue and same-store sales also missing analyst forecasts. The restaurant chain is seeing a negative impact from higher costs for supplies and labor, and its shares slid 3.4% in premarket trading.

Krispy Kreme (DNUT) gained 1.6% in the premarket after beating top and bottom line estimates for its latest quarter. The donut chain's "sales per hub" metric jumped 49.2% for international markets and 19.4% for the U.S. and Canada.

Perrigo (PRGO) fell 4.1% in premarket trading after reporting a mixed quarter, with adjusted profit of 33 cents per share falling short of the 42 cent consensus estimate. However, the over-the-counter drug maker did report better than expected revenue and raised its full-year outlook after completing the acquisition of consumer health care company HRA Pharma earlier this month.

Roblox (RBLX) posted a wider than expected loss for its latest quarter as well as sales that fell shy of Street forecasts. The gaming platform company also said it expects losses to continue for the foreseeable future, as expenses rise and as pandemic-induced demand increases fade. Roblox fell 1.1% in premarket action, paring an earlier 10% off-hours loss.

Unity Software (U) plunged 23% in the premarket, after the video game software developer issued weaker than expected revenue guidance. Its latest quarterly loss matched estimates, but it sales were shy of consensus.

Occidental Petroleum (OXY) added 1.3% in premarket action following an earnings beat for its latest quarter, helped by surging oil prices. Occidental is the top gainer among S&P 500 stocks, having more than doubled this year.

Toyota (TM) said its profit for the current fiscal year could take a 20% hit due to a jump in raw materials costs. The automaker said it would work with suppliers to come up with alternative materials and other ways to reduce expenses. Shares fell 2.2% in premarket trading.

RealReal (REAL) rallied 9.3% in the premarket after the seller of secondhand luxury goods reported better than expected quarterly sales. It did report a wider than expected loss, but it said it was poised to benefit from an inflationary trend in the prices of new luxury goods.

H&R Block (HRB) reported better than expected quarterly sales and profit, with the tax-preparation company also raising its forecast on upbeat tax season results. H&R Block shares jumped 3.3% in premarket trading.

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