Here are five things you must know for Thursday, June 2:
1. -- Stock Futures Higher, Oil Slides, With Jobs Data In Focus
U.S. equity futures nudged higher Thursday, boosted by an overnight slide in oil prices and a modestly softer U.S. dollar, as investors braced for a series of job market readings that could add to growing concerns that inflation will continue to blunt growth prospects in the world's largest economy.
An otherwise solid reading for manufacturing activity in May, based on closely-watched ISM data, was marred by suggestions that factories will likely cut back on hiring in the coming months as supply chain disruptions and input cost increases complicate production.
Payroll processing group ADP will publish its National Employment report this morning at 8:15 am Eastern time, with weekly jobless claims following fifteen minutes later. Friday, of course, will see the release of the official May employment report, which is expected to show hiring slowed to a net 325,000 new positions, the weakest since February.
Oil prices moved sharply lower in overnight trading, taking WTI crude close to $110 per barrel, following a report from London's Financial Times that Saudi Arabia is prepared to boost its monthly output in order to meet the 1 million barrel per day fall-off from Russia linked to western sanctions.
President Joe Biden is also reportedly prepared to fly to Riyadh as part of his effort to find relief for record high U.S. gasoline prices, which hit a fresh all-time peak of $4.71 per gallon last night, according to AAA data.
WTI crude futures for July delivery were marked $2.30 lower in London at $112.96 per barrel while Brent contracts for August, the global benchmark, tumbled $2.34 to $113.95 per barrel.
In overseas markets, European stocks traded modestly higher, with the Stoxx 600 rising 0.47% in early Frankfurt trading while the region-wide MSCI ex-Japan index fell 0.8% in a follow-on move from last night's close on Wall Street.
Benchmark 10-year note yields were trading at a near two-week high of 2.919% amid the faster inflation prospects and the start of the Federal Reserve's balance sheet run-off, which will dump $30 billion in Treasuries and $17.5 billion in mortgage bonds onto the market each month, while the U.S. dollar index slipped 0.22% against a basket of its global peers to 102.274.
Heading into the Thursday, futures tied to the Dow Jones Industrial Average indicating a 100 point opening bell gain while those linked the S&P 500 were priced for a 16 point bump. Futures linked to the tech-focused Nasdaq, which id down 25.85% for the year, are looking at 75 point opening bell advance.
2. -- Meta Shares Recover As Investors React To Sandberg Departure
Meta Platforms (FB) shares edged higher in pre-market trading as investors reacted to news that Chief Operating Officer Sheryl Sandberg, the social media group's second in command, will step down later this year.
Sandberg, who is widely credited with navigating Facebook's transition from a brand value to ad-generated revenue, served under CEO Mark Zuckerberg for fourteen years and was, in many respects, the professional public face of the social media giant.
She's continue to serve on the Meta board, she said, after departing her role in the fall, and hinted at a move in global philanthropy following her tenure at Facebook.
Sandberg's exit, however, adds to a string of high-profile departures from the group as its focuses on its new Metaverse investments, including former CTO Mike Schroepfer and former chief revenue officer David Fischer.
"While we acknowledge Ms. Sandberg’s instrumental role in building Meta’s advertising business, the company now has the infrastructure and processes in place to weather most departures, including Ms. Sandberg's," said JMP Securities analyst Andrew Boone.
Meta shares were marked 0.8% higher in pre-market trading to indicate an opening bell price of $190.15 each.
3. -- GameStop Shares Edge Higher After Mixed Q1 Earnings
GameStop (GME) shares edged higher in pre-market trading after the video game retailer and meme stock favorite posted a wider-than-expected first quarter loss but noted solid gains from online sales.
GameStop, which is hoping to transition from a reliance on brick-and-mortar sales to a larger and more dynamic presence online, said revenues for the three months ending in April rose 8.1% from last year to $1.38 billion, with around half of that total coming from its digital channels.
The group still posted a loss of $2.08 per share, however, and decline to take questions from analysts -- as has been the case for several quarters -- on its regular post-earnings conference call.
"Change is continuing to be embraced across our stores, fulfillment centers, and offices. A constant emphasis on the customer is taking hold up and down the organization," said CEO Matt Furlong. "This will remain key as we pursue sustained sales growth, establish broader offerings in consumer electronics, and launch new products aligned to the long-term future of gaming."
GameStop shares were marked 0.75% higher in premarket trading to indicate an opening bell price of $122.30 each, a move that would leave the stock with a year-to-date decline of around 21%.
4. -- HPE Shares Tumble After Muted Q2, Tepid Sales Outlook
Hewlett Packard Enterprise (HPE) share slumped lower in pre-market trading after the IT services posted modestly weaker-than-expected second quarter earnings and forecast muted near-terms sales growth.
HPE, the services-focused division that was spun out of the former Hewlett Packard in 2015, said non-GAPP earnings for the three months ending in April, its fiscal second quarter, were pegged at 44 cents per share, missing Street estimates by a penny, as revenues rose 0.2% to $6.7 billion.
The group reiterated its view that full-year sales would grow between 3% and 4% this year, with earnings largely in-line with Street forecasts, while noting what it called a "more challenging supply environment that limited upside." for software-as-a-services sales.
"We have momentum across the portfolio with our as-a-service model differentiating us. This quarter, though, through a combination of supply constraints, limiting our ability to fulfill orders as well as some areas where we could have executed better, we did not fully translated the strong customer orders into higher revenue growth," CEO Antonio Neri told investors on a conference call late Wednesday. "I am confident that we have identified where we can strengthen and expect continued improvement as we move into the back half of the year."
Hewlett Packard Enterprise shares were marked 6.2% lower in premarket trading to indicate an opening bell price of $14.80 each, a move that would extend the stock's year-to-date decline to around 6.2%.
5. -- Blue Apron Shares Surge On Walmart Meal Kit Deal
Blue Apron (APRN) shares surged in pre-market trading after the meal kit delivery group said it reached a deal to expand its reach through Walmart (WMT).
Blue Apron said the deal will let new customers buy its kits, without a subscription, through the growing digital channel of the world's biggest retailer. The move comes as Blue Apron looks to offset surging food, marketing and labor costs with a broader product reach following a wider-than-expected loss of $38 million last month.
“Through our work with Walmart.com Marketplace, we will be able to scale our e-commerce presence and introduce restaurant-quality meals without a subscription to a new group of customers who may not have considered meal kits before,” said CEO Dani Simpson. “We are offering Walmart.com’s customer base convenient and delicious meal options that feature a variety of unique and quality ingredients. This is just the beginning, and we look forward to expanding the offering throughout the year.”
Blue Apron shares were marked 11.1% higher in pre-market trading to indicate an opening bell price of $3.41 each, a move that would still leave the stock down nearly 50% for the year.
