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GameStop Extends Meme Rally, Dow Futures Higher With Fed Summit in Sight

The S&P 500 notched its 50th record high close of the year last night, and stocks looks set for another cautious move higher on Wednesday.

The Wednesday Market Minute

  • Global stocks stall as COVID surge raises supply chain, demand issues and investors adopt a cautious stance ahead of Friday's speech from Fed Chair Powell.
  • Germany business morale fades amid supply chain bottlenecks, pending COVID wave, as exports slow.
  • Meme stock rally carries over into pre-market session, with short sellers nursing $1 billion in losses from GameStop and AMC surge. 
  • Jim Cramer hosts 'Action Alerts Plus' investor call at 11:30 am Eastern time
  • U.S. equity futures suggest a modestly firmer open on Wall Street ahead of July durable goods orders and after-the-bell earnings from Salesforce.

U.S. equity futures edged higher Wednesday, extending the 50th record high close for the S&P 500, in typically thin August volumes as investors look to this week's Jackson Hole address from Federal Reserve Chairman Jerome Powell.

Wednesday's tone is cautious, however, with the U.S. dollar index rising 0.03% against a basket of its global peers, to trade at 92.921, as investors continue to fret over the economic impact of a surge in Delta-variant infections on the world economy. 

Fading business sentiment in Germany underscored that concern, with the closely-watched Ifo index falling for a second consecutive month as company bosses in the region's biggest economy worry about supply chain bottleneck's and a government warning of an autumn COVID wave.

In the U.S., House lawmakers pushed forward a $3.5 trillion budget proposal last night, and vowed to vote on a separate $1 trillion infrastructure bill by September 27, setting the path for a massive fiscal push over the coming years in the world's biggest economy. 

Benchmark 10-year Treasury bond yields edged higher on the news, and were last seen at 1.297%, although a stronger-than-expected $60 billion 2-year auction yesterday, which included the strongest foreign buyer interest since 2009, kept those gains in check ahead of Friday's much-anticipated speech from Fed Chair Powell at the virtual central bank symposium in Jackson Hole, Wyoming

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On Wall Street, future contracts tied to the Dow Jones Industrial Average are indicating a modest 20 point opening bell gain, while those linked to the S&P 500 are priced for a 2.5 point bump. Nasdaq Composite futures are indicating a 15 point advance. 

So-called 'meme' stocks were back on the rise, as well, with GameStop  (GME) - Get GameStop Corp. Class A Report extending yesterday's 27.5% rally with a small 0.35% pre-market gain, and AMC Entertainment  (AMC) - Get AMC Entertainment Holdings, Inc. Class A Report rising 3% to $45.58 each. Koss Corp.  (KOSS) - Get Koss Corporation Reportgained 2%.

Nordstrom  (JWN) - Get Nordstrom, Inc. (JWN) Report shares, meanwhile, slumped 8.5% to $34.60 each after the retailer said supply chain issues could hit quarter-quarter sales, clouding a stronger-than-expected second quarter earnings report

In overseas markets, Europe's Stoxx 600 index edged 0.1% higher in thin August holiday volumes, while London's FTSE 100 was marked 0.18% higher in mid-morning London trading.

Overnight in Asia, Japan's Nikkei 225 slipped 0.03% in a muted session to close at 27,721.00 points while a stalled rally in China tech stocks kept the region-wide MSCI ex-Japan index in check as the benchmark rose 0.38% heading into the close of trading.