U.S. stock index futures edged higher on Wednesday as investors weighed the unwinding of pandemic restrictions by China against surging COVID cases in the world's second largest economy.
Market Snapshot
At 7:50 a.m. ET, Dow e-minis were up 98 points, or 0.29%, S&P 500 e-minis were up 9.75 points, or 0.25%, and Nasdaq 100 e-minis were up 18.25 points, or 0.17%.
Pre-Market Movers
Tesla – Tesla gained 2.5% in the premarket in a volatile session, following a seven-day losing streak and declines in ten of the past eleven sessions. Baird reduced its price target on Tesla to $252 per share from $316, but continues to rate the stock outperform.
AMC Entertainment – AMC Entertainment rose 1.2% in premarket trading after CEO Adam Aron asked the movie theater chain’s board to freeze his salary. He also urged other top AMC executives to do the same.
Southwest Airlines – Southwest Airlines fell 1.3% in premarket action as it continues to cancel flights in its struggle to return to a normal schedule. Southwest has canceled thousands of flights over the past week, following a severe winter storm, and is limiting bookings over the next few days.
Nvidia, Micron Technology – These and other semiconductor stocks remain on watch as investors focus on an oversupply of chips. That is in sharp contrast to the global shortage during the pandemic, when demand was surging.
Apple – Apple is marginally higher in the premarket following its Tuesday close, which was the lowest since June 2021. Apple fell during the past three days and in eight of the past nine trading sessions.
Lyft – The ride-hailing company’s stock remains on watch after closing lower than $10 per share for the first time since going public in 2019. It rebounded by 1.1% in premarket trading.
Generac – The power equipment maker’s stock was rated buy in new coverage at Janney Montgomery Scott with a price target of $160, implying a 76% upside from current levels. Generac is the worst performer in the S&P 500 for 2022 with a 74.1% decline.
Market News
Tesla Dip Buyers Return as Stock Snaps Near-Record Losing Streak
Dip buyers are on track to rescue Tesla Inc. from an eighth straight day of losses, which would have been the longest ever losing streak for the electric vehicle maker.
The stock erased a drop of over 4% to trade higher by 2.5%. It’s poised to slightly trim a 69% loss this year which has put Tesla among the worst performers on the S&P 500 Index in 2022 amid concerns about ebbing demand and wider jitters about growth assets.
AMC CEO Asks for Salary Freeze in 2023 As Shares Slump
AMC Entertainment Holdings Chief Executive Officer Adam Aron on Tuesday asked the theater chain operator's board to freeze his compensation next year because of a sharp drop in the company's shares.
"I do not want 'more' when our shareholders are hurting," Aron, who earned $18.9 million in 2021, said in a series of tweets urging other top AMC executives to also forego their hikes.
Hong Kong Ends Limit on Group Gatherings, Scraps Vaccine Pass
Hong Kong will end some of its last major Covid rules, scrapping limits on public gatherings and no longer requiring proof of vaccination for entry to some venues, in a sweeping overhaul of policies aimed at reviving its reputation as a global financial center.
There will be no cap on public gatherings, and the city’s vaccine pass will also be scrapped, starting from Thursday, Chief Executive John Lee said Wednesday. The city will also no longer require arrivals to undertake PCR tests, though they’ll be recommended to do rapid tests for five days, and close contacts of Covid-positive people won’t need to quarantine, he said.
Chip Inventories Swell as Consumers Buy Fewer Gadgets
The oversupply marks a sharp turnaround from a global shortage during two years of supercharged demand. Consumer appetite for electronics has weakened against a backdrop of rising interest rates, a falling stock market and recession fears. Chip inventories are swelling, mirroring what is happening in the wider economy where retailers are stuck with goods on their shelves and producers of a range of products in high demand early in the pandemic now face a glut.
What is happening in chips amounts to good news for consumers who can get their hands on products from washing machines to laptops faster, and sometimes more cheaply, than a year ago. For chip makers, the shift has triggered a wave of job cuts and reduction in capital spending as companies try to restore profitability levels that have eroded in recent months.
Pfizer's Pentavalent Meningococcal Vaccine Gets FDA Review
The U.S. Food and Drug Administration (FDA) accepted for review Pfizer's application seeking approval for its pentavalent meningococcal vaccine candidate (MenABCWY)
The New York-based pharma giant submitted a biologics license application (BLA) for MenABCWY to prevent meningococcal disease caused by the most common serogroups in individuals 10 years through 25 years of age.
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