Here are five things you must know for Tuesday, May 3:
1. -- Stock Futures Edge Higher Amid Rate Hike Bets, Heighted Volatility
U.S. equity futures edged higher Tuesday, while the dollar held onto gains against its global peers and Treasury yields pierced multi-year peaks, as investors braced for another volatile session ahead of the Federal Reserve's policy decision later on Wednesday.
Benchmark 10-year note yields traded north of 3% for the first time since December 2018 late Monday, and scaled that peak again in the overnight session -- pulling 10-year German bunds past 1% for the first time since 2015 -- as markets around the world recalibrate asset prices in face of hawkish central bank signaling and the fastest inflation readings since the 1980s.
The CME Group's FedWatch is pricing in a 99.8% chance of a 50 basis point hike on Wednesday, as well as a 95.6% chance of a 75 basis point move at the Fed's following meeting in June.
The Reserve Bank of Australia, in fact, went from signal to action with its first rate hike in more than a decade overnight, lift its benchmark 'cash rate' by 25 basis points, to 0.35%, in a surprise move that unsettled regional markets.
In Europe, solid earnings and a softer currency, which helps make exports more attractive, helped the Stoxx 600 to an early 0.67% gain, while the dollar index traded at a near 20-year high of 103.52 against a basket of its global peers.
Slowing factory activity readings from major economies around the world, as well as China's inability to curb its 2022 surge in Covid infections, continued to push oil prices lower, even amid accelerated talk of a ban on Russian exports by European lawmakers.
WTI crude futures for June delivery were marked 98 cents lower in overnight trading to change hands at $104.19 per barrel, while Brent contracts for July fell $1.19 to trade at $106.39 per barrel,
On Wall Street, futures contacts tied to the Dow Jones Industrial Average indicating a modest 25 point opening bell gain while those linked the S&P 500 priced for a 5 point dip. Futures linked to the tech-focused Nasdaq are looking at a 10 point move to the downside.
2. -- Tesla Shares Higher On Report Musk Seeking Alternatives to Twitter Financing
Tesla (TSLA) and Twitter (TWTR) shares edged higher in pre-market trading following a report that suggested Elon Musk is looking for a broader collection of financing to support his $44 billion takeover of the social media group in a move that could put less pressure on existing Tesla investors.
Reuters reported late Tuesday that Musk, who has already sold around $8.5 billion in Tesla shares over the past month, is seeking different options to achieve the $21 billion he needs to provide for the deal, which is expected to close sometime in the autumn. Tesla shares have fallen 21.2% since Musk first made his interest in Twitter public on April 4 as investors plug in the value of Musk's $62.5 billion in pledged stock.
Tesla, for its part, said in a Securities and Exchange Commission filing that it needs more time to count the value of shares that Musk has pledged against various personal and business loans ahead of its August 4 AGM in Austin.
Tesla shares were marked 0.22% higher in pre-market trading to indicate an opening bell price of $902.95 each while Twitter edged 0.5% higher to $49.40 each, still some 9% south of Musk's $54.20 bid price.
3. -- Logitech Shares Tumble After Q4 Earning Miss, Sales Forecast Cut
Logitech International (LOGI) shares slumped lower in pre-market trading after the maker of PC equipment posted weaker-than-expected fourth quarter earnings and cut its full-year sales outlook.
Logitech, which makes webcams, mice and computer keyboards, said sales for its coming fiscal year, which ends in March of 2023, would come in between $875 million and $925 million, thanks in part to waning PC demand and the impact of Russia's war on Ukraine to its eastern European business.
The cuts followed a fourth quarter earning report that showed sales fell 20% from last year to $1.23 billion, pulling operating income 56% lower to $129 million.
Logitech shares were marked 3.6% lower in pre-market trading to indicate an opening bell price of $63.95 each.
4. -- BP Shares Leap After Profit Surge Offsets Russia Exit Writedown
BP plc's (BP) U.S.-listed shares jumped higher in pre-market trading after the oil major posted its strongest underly quarterly earnings since 2008, while boosting its buyback plans, despite a $24 billion writedown linked to its exit from Russia earlier this year.
BP's headline first quarter loss of $20.4 billion was the biggest in its history, but surging energy prices still helped the group into a stronger-than-expected underlying bottom line of $6.2 billion, a 135% leap from the same period last year.
With surplus cash flow of around $4 billion, BP said it will boost its Q2 share buyback to $2.5 billion, a $1 billion improvement from its prior estimate.
BP's U.S.-listed shares were marked 4.2% higher in pre-market trading to indicate an opening bell price of $30.07 each. The stock was marked 2.3% higher in late morning trading in London.
5. -- Leaked Opinion Suggests SCOTUS Reading To Overturn Roe v Wade
A leaked judicial opinion, published late Monday, appears to suggest that the Supreme Court is ready to overturn Roe v Wade, a seminal case in U.S. law that has codified abortion rights for nearly 50 years.
Politico published the leak, based on an opinion written by Justice Samuel Alito and allegedly supported by other conservative court members, including former President Donald Trump's recent appointee, Amy Coney Barrett, that declares Roe to be "egregiously wrong from the start."
"Abortion presents a profound moral question," the opinion reportedly read. "The Constitution does not prohibit the citizens of each state from regulating or prohibiting abortion."
If the opinion proves valid, it could suggest the Court is prepared to overturn Roe in the coming months, following oral arguments in December on a case brought against the state of Mississippi's attempt to ban abortions after 15 weeks of pregnancy.
The decision could also establish battle lines between Republican and Democratic lawmakers heading into mid-term elections in November.
