Here are five things you must know for Wednesday, November 24:
1. -- Stock Futures Lower Ahead of Thanksgiving Break
U.S. equity futures drifted lower Wednesday, while Treasury yields nudged higher and the dollar extended gains against its global peers, as investors brace for the final full trading session of the Thanksgiving-shortened week.
High value growth stocks are likely to come under pressure again Wednesday, following two consecutive sessions of declines for the Nasdaq, as Treasury yields creep higher amid bets that the Federal Reserve will accelerate its effort to fight inflation with faster bond purchase tapering.
However, reports from Germany suggest Europe's biggest economy could return to a full lockdown in the coming days amid a surge in COVID infections and a disappointing take-up in the country's vaccine drive, a decision which could pare risk appetite in both the region, and broader global markets, in the weeks ahead.
On Wall Street, futures contracts tied to the Dow Jones Industrial Average are indicating a 145 point opening bell decline while those linked to the S&P 500 are priced for an 18.5 point move to the downside.
Futures tied to the tech-focused Nasdaq Composite are indicating a 75 point dip as benchmark 10-year Treasury note yields climbed to 1.646% in overnight trading.
2. -- Oil Slides As SPR Release Impact Ripples Through Markets
Global oil prices slipped modestly lower in overnight trading amid a jump in the U.S. dollar and questions over demand strength in Europe as markets unwound their initial reaction to yesterday's decision from President Biden to sell crude from the Strategic Petroleum Reserve.
The 50 million barrel release, the first since 2011, was paired with smaller sales from China, India, Japan and South Korea, as well as a voluntary effort from oil companies in the United Kingdom. However, as a large portion of the release was in the form of a swap -- which must be returned to the SPR in the coming weeks -- and amounts to only a few days' worth of U.S. supply, the market affect was muted.
Reports of an impending lockdown in Germany, as well as rising COVID infection rates around Europe, are also helping crude prices lower in the Wednesday session, with WTI futures for January delivery marked 2 cents lower at $78.49 per barrel. Brent crude contracts for January, the global benchmark, fell 5 cents to $82.29 per barrel.
3. -- Gap Shares Plunge After Gloomy Holiday Sales Forecast
Gap Inc (GPS) - Get Gap, Inc. (GPS) Report shares plunged lower in pre-market trading after the struggling apparel retailer cut its full-year profit forecast following a disappointing third quarter earnings report marred by supply chain disruptions and rising input costs.
Gap said it would take a $650 million hit to current-quarter sales as a result of factory closures in Vietnam and rising freight prices, and forecast full-year revenue growth that will be around 20% higher than 2020 levels, a 10 percentage point reduction from its prior forecast.
For the three months ending in October, Gap posted adjusted earnings of 27 cents per share -- missing Street estimates by 13 cents -- on revenues of $3.94 billion.
Gap shares were marked 18.1% higher in pre-market trading to indicate an opening bell price of $19.25 each.
4. -- Nordstrom Plummets on Supply Chain Hit to Rack Inventories
Nordstrom (JWN) - Get Nordstrom, Inc. (JWN) Report shares plummeted in pre-market trading after the department store retailer warned of holiday supply shortages as rising labor costs and supply chain delays wreak havoc across the sector.
Nordstrom posted weaker-than-expected third quarter earnings of 39 cents per share, on sales of $3.64 billion, and held to its full-year forecasts on both profits and revenues despite the supply chain hit.
"We recognize the need to move faster and more aggressively. We are taking decisive steps to improve Rack performance, increase profitability, transform our supply chain, and create value for our shareholders," CEO Erik Nordstrom told investors on a conference call late Tuesday. "All said, we remain confident in our ability to achieve the top and bottom-line commitments we set forth at our investor event and continue to build capabilities to profitably grow our market share."
Nordstrom shares were marked 26.5% lower in pre-market trading to indicate an opening bell price of $23.48 each.
5. -- Tesla Edges Lower as Musk Dumps More Shares
Tesla (TSLA) - Get Tesla Inc Report shares edged lower in pre-market trading after founder and CEO Elon Musk unveiled another batch of share sales, offloading just over $1 billion in the clean-energy carmaker.
Musk, who has long planned to sell some of his shares to raise cash for a pending tax liability, told his Twitter followers on November 6 that he'll dump 10% of his stake. Last night's sale, which coincided with exercising options that allow him to buy 2.15 million shares, raised $1.05 billion.
To date, Musk's sales have totaled around 9.2 million shares worth around $9.9 billion, a figure that represents just over half of that 10% pledge.
Tesla shares were marked 1.25% lower in pre-market trading to indicate an opening bell price of $1,096.00 each.