U.S. stock futures declined after stubborn US inflation bolstered the case for more aggressive monetary tightening by the Federal Reserve.
Market Snapshot
At 8:00 a.m. ET, Dow e-minis were down 239 points, or 0.75%, S&P 500 e-minis were down 40.75 points, or 1.04%, and Nasdaq 100 e-minis were down 198 points, or 1.65%.
Pre-Market Movers
Ford, General Motors – Ford fell 2.8% in premarket trading while GM slid 3.4% after Wells Fargo double-downgraded both stocks to “underweight” from “overweight.” Wells Fargo said 2022 could represent a profit peak for legacy automakers, with the shift toward electric vehicles eroding profits in the years ahead.
Tapestry – Tapestry gained 2.9% in the premarket after the company behind the Coach and Kate Spade luxury brands reported an adjusted 51 cents per share quarterly profit, 10 cents above estimates. Tapestry did cut its outlook for the fiscal year ending in June, due in part to the impact of Covid-related shutdowns in China.
Six Flags – The theme park operator’s shares jumped 7.7% after Six Flags reported a smaller than expected loss, as well as revenue which exceeded Street forecasts. The results were helped by an increase in attendance and in spending per guest.
WeWork – WeWork shares surged 8% in the premarket following the release of its quarterly results. The office-sharing company reported revenue that exceeded its prior guidance, plus a quarterly loss that was 37% lower than in the prior quarter, as well as its best gross sales since the first quarter of 2020.
Sonos – The maker of high-end audio products saw its stock rally 6.8% in the premarket following its quarterly results. Sonos saw better than expected revenue amid continued high demand, although it did say growth might be impacted by ongoing supply chain issues.
Walt Disney – Disney slid 4.2% in premarket trading after reporting lower than expected profit and revenue for its latest quarter. Disney had initially risen in off-hours trading, as investors focused on a better than expected increase in subscriber numbers for its Disney+ streaming service.
Beyond Meat – Beyond Meat shares plummeted 26.3% in the premarket, as the maker of plant-based meat alternatives reports a larger than expected quarterly loss and revenue which fell shy of analyst estimates. CEO Ethan Brown said the company’s results were impacted by costs associated with strategic launches that he said would pay off over the long term.
Rivian Automotive – Rivian jumped 5.3% in premarket action, despite a wider than expected quarterly loss and lower than expected revenue. The electric vehicle maker maintained its 2022 production forecast, saying it expected supply chain issues to ease later this year.
Lordstown Motors – Lordstown surged 15.9% in the premarket after the electric vehicle company completed a deal to sell various assets to contract manufacturer Foxconn. Lordstown will receive $260 million in proceeds from the deal.
Bumble – Bumble shares jumped 9.8% in premarket trading after the dating-service operator reported quarterly results that exceeded analyst estimates. Bumble saw a 7.2% rise in paying users during the quarter, with a Covid-19 resurgence helping dating apps keep the users they gained during the pandemic.
Market News
Google Shows off Smartwatch, New Phones at I/O Developer Conference
Google's I/O developer conference keynote Wednesday confirmed longstanding rumors that it's making its own smartwatch - an all-in move that sets up a face-off with the success of the Apple Watch.
The Pixel Watch is the "first watch built inside and out by Google," coming in the fall, the company's Rick Osterloh says. As expected, there's "deep integration" with Fitbit, acquired by Google in January 2021.
Osterloh also announced (with a year-long runway) a new Pixel Tablet based on the company's custom Tensor silicon, coming at some point in 2023.
Toyota Rolls out First Battery Electric Car in Cautious Debut as Rivals Go Full-Throttle
Toyota Motor Corp rolls out its first mass-produced battery electric car in Japan on Thursday for lease only, a strategy the automaker says will help ease driver concerns about battery life and resale value but has raised analysts' eyebrows.
Gasoline-electric hybrid models remain far more popular in Toyota's home market than electric vehicles (EVs), which accounted for just 1% of the passenger cars sold in Japan last year, according to industry data. Still, the market is growing fast and foreign automakers including Tesla Inc are making visible inroads on the streets of cities such as Tokyo.
Bundling insurance, repair costs and a battery warranty into the deal, Toyota will lease the bZ4X sport utility vehicles (SUV) at the equivalent of $39,000 for the first four years. Cancelling in the first 48 months will mean an additional fee.
Lordstown Motors Has Completed a Deal to Sell Assets to Foxconn
Lordstown Motors Corp said it has completed a deal to sell certain assets to Taiwanese contract manufacturer Foxconn, clinching funds essential for the production of its Endurance electric pickup truck.
The struggling EV maker last year entered an agreement with Foxconn for the sale of its Ohio facility for $230 million, excluding certain assets such as the hub motor assembly and battery pack lines.
Under the agreement, the two companies would create a joint venture to make future vehicles, with Lordstown owning a 45% stake and Foxconn owning the rest.
Instacart Is Said to File Confidentially for U.S. IPO That May Happen This Year
Instacart is working with Goldman Sachs and Morgan Stanley on an IPO, according to a Bloomberg report.
The IPO news comes after Bloomberg reported in March that Instacart (ICART) slashed its valuation by almost 40% to about $24 billion, a large drop from the $39B valuation the grocery delivery firm was tagged within a March 2021 fundraising round that included venture capital titans Andreesen Horowitz, Sequoia Capital and hedge fund D1 Capital Partners.
The Instacart IPO comes as the service faces competition from DoorDash and Uber - not to mention start-up GoPuff and also Whole Foods parent Amazon.com.
Jeff Bezos Unloaded About 47,700 Amazon Shares, but Didn't Specify Who Received the Contribution
Jeff Bezos donated roughly $120 million in Amazon stock to a nonprofit organization, but the recipient of the money is a mystery so far.
In an SEC filing, Bezos detailed donating 47,727 shares on May 3 and May 4 to a "non-profit organization," but did not list which group received the shares, worth just over $120 million based on May 3 and May 4 closing prices. The donation was first reported by Forbes.
Bezos's most well-known philanthropic initiatives are the Bezos Earth Fund, which is a $10 billion effort targeting climate change, and the Bezos Day One Fund, which donates to groups serving families experiencing homelessness and is building a nationwide network of free preschools for low-income children.