Here are five things you must know for Thursday, June 23:
1. -- Stock Futures Mixed, Growth Worries Hit Oil, Treasury Yields
U.S. equity futures edged modestly higher Thursday, while oil prices and Treasury bond yields resumed their recent slides, as investors heeded Federal Reserve Chairman Jerome Powell's warning that a near-term recession in the world's biggest economy is possible.
Speaking in front of the Senate Banking Committee on Capitol Hill yesterday, Powell reiterated that the Fed's inflation fight, which includes higher rates and a pullback in liquidity, isn't designed to "provoke' a recession, although he conceded that it was "certainly a possibility".
He also added that, despite the Fed's recent rate hike, which takes the central bank's target lending range to between 1.5% and 1.75%, as well as signaling further near-term moves to the upside, "further surprises could be in store." in terms of faster-than-expected inflation readings.
The grim assessment, even alongside assurances that the Fed can engineer a so-called 'soft landing' from its current challenges, has given investors even more reason to remain retrenched in risk-free markets amid the worst first-half start for U.S. equities since the early 1960s.
Global oil prices, for instance, are trading firmly lower again Thursday, with WTI crude futures for August delivery marked $2.51 south of yesterday's close to change hands at $103.73 per barrel, as markets react to the prosect of weakening near-term demand.
Benchmark 10-year Treasury bond yields slumped to 3.098% in overnight trading while 2-year notes were trading at 3.021%, a narrowing of the so-called yield curve that suggests bond investors are pricing in increasing recession risk.
In overseas markets, Europe's region-wide Stoxx 600 was marked 1.11% lower in early Frankfurt trading, following on from a 0.25% gain for Asia's MSCI ex-Japan benchmark.
On Wall Street, futures tied to the Dow Jones Industrial Average are indicating a 122 point opening bell bump while those linked the S&P 500, which is down 21.1% for the year -- its worst first half performance since 1962 -- are priced for a 10 point gain. Futures linked to the tech-focused Nasdaq are looking at 75 point opening bell advance.
2. -- Elon Musk Says Tesla Factories 'Gigantic Money Furnaces'
Tesla (TSLA) - Get Tesla Inc. Report shares edged higher in pre-market trading following publication of an interview with CEO Elon Musk where he warned of billions in losses from his newly-opened factories in Texas and Berlin.
Speaking with the Tesla Owners of Silicon Valley in late May, for a YouTube interview released Wednesday, Musk called the new gigafactories "gigantic money furnaces."
"It's really like a giant roaring sound, which is the sound of money on fire," Musk told the owners' club, adding that "the past two years have been an absolute nightmare of supply chain interruptions, one thing after another, and we're not out of it yet."
The grim assessment could suggest that Tesla's second quarter results, which are also likely to be impacted by a weeks-long shutdown of its gigafactory in Shanghai, could see the clean-energy carmaker return to the red.
Tesla shares were marked 1% higher in pre-market trading to indicate an opening bell price of $715.50 each.
3. -- Occidental Shares Edge Higher As Buffet Adds To Stake
Occidental Petroleum (OXY) - Get Occidental Petroleum Corporation Report shares nudged higher in pre-market trading following news that billionaire investors Warren Buffett has upped his stake in the oil major for the third time in four months.
Buffett's Berkshire Hathaway (BRK.A) - Get Berkshire Hathaway Inc. Report investment group purchased around $530 million in Occidental shares last week, according to Securities and Exchange Commission filings, taking its overall stake to around 152.7 million shares. That gives Buffett a 16% stake in the group that's now worth around $8.52 billion.
Buffett first began adding to his Occidental in March, following Carl Icahn's exit following three years of investment in the energy group, and bumped his stake again later that month.
Since then, global crude prices have surged more than 15% thanks in part to the U.S. ban on Russian crude sales. Occidental is also seen as attractive given its foothold in the shale-rich Permian Basin of West Texas and New Mexico as U.S. drillers focus on domestic assets and international rivals exit Russian joint ventures with the state-backed energy giant Rosneft.
Occidental shares were marked 0.6% higher in premarket trading to indicate an opening bell price of $56.10 each.
4. -- JPMorgan Cuts Mortgage Jobs As Housing Market Cools
JPMorgan Chase (JPM) - Get JP Morgan Chase & Co. Report shares edged lower in pre-market trading following reports that the country's biggest bank is planning job cuts in its mortgage business amid the suddenly-cooling housing market.
The move, first reported by Bloomberg, will see JPMorgan either laying off or redeploying around 1,000 people in its mortgage unit, citing "cyclical changes in the market."
Last week, Real estate broker Redfin Corp. (RDFN) - Get Redfin Corporation Report, said earlier this week it would layoff around 8% of its workforce and cautioned that the group could be facing "years, not months, of fewer home sales."
U.S. mortgage rates rose to the highest levels nearly fourteen years last week, an industry lobby group said Wednesday, while May housing starts fell 14.4% to an annual rate of 1.549 million and permits for new construction were also down 7% to a weaker-than-expected pace of 1.695 million.
JPMorgan shares were marked 0.42% lower in premarket trading to indicate an opening bell price of $114.70 each, a move that would extend the stock's year-to-date decline to around 27.6%.
5. -- FedEx Shares Edge Lower Ahead of Q4 Earnings
FedEx, which has been under pressure from activist investors at D.E. Shaw Group following the retirement of founder and former CEO Fred Smith earlier this year, is expected to see its bottom line rise 37.1% from last year to $6.87 per share, with revenues up 8.6% to just over $24.5 billion.
Last week, the group pledged to add three new members to its board of directors while reducing its planned capex-to-revenue targets in order to return more cash to investors and aligning executive pay more closely to shareholder returns.
FedEx also boosted its quarterly dividend by more than 53%, to $1.15 per share, sending the stock on his highest single-day gain, in percentage terms, since the mid-1980s.
FedEx shares were marked 0.6% lower in pre-market trading to indicate an opening bell price of $227.70 each.