Stock futures edged higher ahead of Wednesday’s double-feature of inflation data and the Federal Reserve’s policy decision and projections.
The Fed is widely expected to hold its benchmark rate steady. Investors will dissect updated economic and interest-rate projections that are expected to show policymakers have reduced their forecasts for rate cuts this year and next.
An inflation surprise could lead policymakers to make last-minute adjustments to their projections, however.
The consumer-price index is expected to show price pressures were broadly unchanged in May. Economists forecast the gauge rose 3.4% from a year earlier, while annual core inflation is expected to slow slightly from the prior month.
Overseas Markets
European stocks and bonds rose and the euro stabilized. Investors have been rattled in recent days by European Parliament results.
Premarket Movers
Apple was little changed premarket, after surging over 7% on Tuesday to a record high. The iPhone maker laid out a new AI strategy at the start of the week.
GameStop was down 6.1% after rising 23% on Tuesday. Earlier this week, Keith Gill, the individual investor known as Roaring Kitty, showed he was holding his position in shares of the video game retailer.
Oracle announced new artificial-intelligence deals with Google, Microsoft and OpenAI on Tuesday, overshadowing weaker-than-expected quarterly results. Shares rose 9%.
Paramount Global was down 2.3% after Shari Redstone ended discussions to sell her controlling stake to Skydance Media and merge the two companies.
Post Close Movers
Beamr Imaging said it had received a recognition given to certain applications that use Oracle cloud infrastructure. The company’s Beamr Cloud solution is now available in the Oracle Cloud Marketplace, which the company said would allow for customers to easily take advantage of its offering. Shares rose 48%.
Casey’s General Stores posted revenue and profit that handily topped analysts’ expectations, with a 5% increase in inside same-store sales. Management said the company expects inside same-store sales growth of 3% to 5% in the current fiscal year. Shares rose 6%.
Rubrik reported better-than-expected results in its first quarter as a public company and issued guidance for annual recurring revenue in fiscal 2025 that topped estimates. The stock rose 2%.
Watch For:
CPI for May; EIA Weekly Petroleum Status Report; World Agricultural Supply & Demand Estimates (WASDE); FOMC Interest Rate Decision
Today’s Top Headlines/Must Reads:
– The World Will Be Swimming In Excess Oil by End of Decade, IEA Says
– Property’s Big Short Isn’t Going to Plan
– Amazon to Invest Billions in Taiwan Cloud Infrastructure
The dollar could fall if inflation data undershoot expectations and Powell signals interest-rate cuts are on their way, ING said.
The Fed could remove its statement about a lack of progress towards its inflation target. “Powell typically delivers a dovish press conference and the dollar has ended lower on the day over the last four consecutive FOMC meetings.”
The euro has taken a significant hit in the aftermath of the European parliamentary elections and is expected to drop further towards support at $1.07, Swissquote Bank said.
The euro “remains heavily offered” against the dollar and “is preparing to test the $1.07 support to the downside.”
The euro could face turbulence against the dollar later in the day, though, when U.S. inflation data are released and the Fed makes its policy announcement.
Bonds:
Inverted yield curves–where longer-dated bond yields trade below their shorter-dated counterparts–isn’t a new norm and they should normalize, Pimco said.
“The long end of the yield curve will normalize from the fiscal side, while front-end yields will fall as interest rate cuts will be delivered.”
In Europe, risks to the fiscal outlook are increasing, Pimco added. It also said that global yield curves will steepen as central banks cut rates.
Energy:
Oil prices rose on reports of falling U.S. crude oil inventories and on higher global demand views.
Commercial crude stocks are expected to have fallen by 1.2 million barrels last week, according to a Wall Street Journal survey.
The EIA raised its 2024 forecast for global oil consumption growth by around 200,000 barrels a day to 1.1 million barrels a day, while OPEC kept its bullish demand-growth estimates unchanged.
Metals:
Gold futures edged higher, remaining largely rangebound ahead of the U.S. CPI data and the Fed’s rate decision.
DHF Capital SA said gold could rebound if core inflation data is weaker than expected, supporting an earlier interest-rate cut.
The metal could also find safe haven support from political events in Europe, with French President Emmanuel Macron’s decision to call snap elections increasing political uncertainty in France, the eurozone’s second-largest economy, DHF Capital added.
Commonwealth Bank of Australia said it isn’t too surprising to see iron-ore prices fall back into the $100–$110-a-metric-ton range. It reckons such prices align with trends in Chinese steel demand and output, which have been fairly flat.
TODAY’S TOP HEADLINES
Federal Authorities Say UnitedHealth Can Notify Victims of Massive Data Breach
Federal regulators said UnitedHealth Group will be allowed to notify people whose data was exposed during a ransomware attack on its Change Healthcare unit in February. That means UnitedHealth can notify victims of the many U.S. hospitals and healthcare providers whose patients were affected by the hack, sparing providers from time-consuming and expensive work.
For months, hospitals and other care providers have urged the U.S. Department of Health and Human Services to shift the notification burden to UnitedHealth and Change, saying they lack the money and information to properly inform patients about the breach. HHS on May 31 agreed, making an exception to the federal Health Insurance Portability and Accountability Act, which generally mandates the provider notify victims.
Elon Musk’s Boundary-Blurring Relationships With Women at SpaceX
When Elon Musk personally contacted a former SpaceX engineering intern to discuss a role on his executive staff in 2017, the woman spoke with excitement to her friends about a high-profile problem-solving role at the rocket company, a dream for someone a few years out of college.
She and Musk had met years earlier during her internship, when she was still in college. She’d approached him with ideas for improving SpaceX. Her outreach had led to a date, which led to a kiss, and eventually sex, she told friends. The year after her internship, the billionaire had the fresh college graduate flown out to a resort in Sicily, before they ended things, according to documents reviewed by The Wall Street Journal.
China Inflation Stays Low Amid Tepid Consumer Spending
China’s consumer prices rose mildly last month while its factory-gate prices continued to fall, suggesting persistently tepid demand as Beijing continues to try to lift lackluster consumption.
The country’s consumer-price index rose for a fourth consecutive month in May, edging up 0.3% from a year earlier, the National Bureau of Statistics said Wednesday. That matched the 0.3% expected by economists in a Wall Street Journal poll and was unchanged from April’s increase.
Bitcoin Drops Amid ETF Outflows. Trump Wants Crypto to Be ‘Made in the U.S.A.’
Bitcoin and other cryptocurrencies were falling early Wednesday as exchange-traded funds tied to the cryptocurrency faced outflows. However, former U.S. President Donald Trump is looking to get the support of the crypto industry.
Bitcoin was down 0.5% over the past 24 hours to $67,286. Bitcoin hit a record high near $74,000 in mid-March amid a surge of interest from new spot exchange-traded funds but its price has dropped since then.
Rep. Nancy Mace Defeats GOP Challenger Backed by McCarthy Allies
Rep. Nancy Mace fended off a Republican primary challenger in a closely watched South Carolina race Tuesday, following a tumultuous year in which she joined other GOP rebels to oust former Speaker Kevin McCarthy.
With nearly two-thirds of the vote tallied, Mace led challenger Catherine Templeton 57% to 30%, with a third candidate, William Young, at 13%. The Associated Press projected Mace would secure the majority needed to avoid a runoff. The conservative makeup of the district means Mace is likely to win in the fall and hold on to her seat for a third term.
Biden’s Alliance-Building Tested by Trump at Home and Abroad
President Biden has been a coalition-builder on the world stage. But as he seeks re-election, he is facing the re-emergence of the far right-and the specter of the strongman-both at home and abroad.
Biden’s ability to hold together a Western alliance, central to the defense of Ukraine in its war against Russia, will be at the forefront when he arrives Wednesday in southern Italy’s Puglia region for the Group of Seven industrialized nations summit.
GDI Integrated Facility: Stephane Lavigne to Retire as Senior Vice Pres and CFO and Will Be Transitioning out of This Role Effective Sept 30; Promoting Charles-Etienne Girouard to Senior Vice Pres, Finance Ops and Digital Transformation of GDI, Effective Immediately; Board Approved Appointment of Robert McGuire as Executive Vice-Pres, Business Services, N Amer, Effective June 21
10:00/FRA: 1Q OECD Quarterly National Accounts G20 GDP growth
