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Juneteenth, Adobe, FAANG, Orphazyme - 5 Things You Must Know

Stock futures turn lower as investors continue to assess signals from the Fed that rates could be raised earlier than expected; stock markets will be open for Juneteenth; Adobe's third-quarter forecast tops estimates.

Here are five things you must know for Friday, June 18:

1. -- Stock Futures Fall Friday

Stock futures tumbled Friday as investors continued to assess signals from the Federal Reserve that interest rates could be raised earlier than expected.

Contracts linked to the Dow Jones Industrial Average fell 158 points, S&P 500 futures were down 14 points and futures on the tech-heavy Nasdaq dropped 12 points after rising earlier.

The yield on the benchmark 10-year Treasury note declined early Friday to 1.482%.

Stocks finished mixed on Thursday with high-growth tech shares posting solid gains after the Federal Reserve indicated it would tighten monetary policy earlier than previously anticipated.

The Fed forecast that it likely will raise rates two times by the end of 2023 and Chairman Jerome Powell said the central bank has begun discussing when to begin pulling back on bond purchases of $120 billion a month. That support from the Fed has helped push stock markets to record highs.

While Powell said a tapering was likely “a ways away,” Wall Street's guessing game of exactly when the Fed might begin the process has begun.

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2. -- Stock Markets Are Open for Juneteenth

Stock markets and Wall Street banks will be open Friday, a day after President Joe Biden signed a bill to set aside Juneteenth, or June 19, as a federal holiday to commemorate the end of slavery in the U.S.

But it may not always be that way for Wall Street.

Because the holiday falls on a Saturday this year, government workers have been given off Friday, June 18. But financial markets will operate more or less as usual.

The Securities Industry & Financial Markets Association said it won’t recommend that fixed-income markets close.

Any decision about whether to make Juneteenth a market
holiday “will be part of our annual calendar review during which
we consult with stakeholders,” Katrina Cavalli, a Sifma
spokeswoman, said in an emailed statement to Bloomberg.

U.S. markets will remain open Friday because of how quickly the legislation passed through Congress, USA Today reported, citing people familiar with the matter.

The New York Stock Exchange and Nasdaq will be open Friday, but exchanges will participate in industry discussions in the coming months to evaluate closing markets for the holiday in 2022 and beyond, the people added.

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3. -- Adobe Rises as Forecast Tops Estimates

Adobe  (ADBE) - Get Report was rising 3% in premarket trading Friday after the software company's second-quarter earnings and third-quarter forecast topped analysts' estimates.

Adobe, the maker of Photoshop, said it expects adjusted earnings in the third quarter of $3 a share on revenue of about $3.88 billion.

Analysts had been calling for adjusted profit of $2.89 a share on revenue of $3.83 billion.

“Adobe delivered strong Digital Media annualized recurring revenue and Digital Experience bookings, as well as record cash flows from operations in Q2,” said John Murphy, Adobe's executive vice president and chief financial officer, in a statement. 

“The large market opportunity and momentum we are seeing across our creative, document and customer experience management businesses position us well to deliver another record year,” Murphy added.

The stock rose 3.07% to $568.30 in premarket trading Friday.

4. -- Cramer Endorses FAANG Stocks After Fed Signals Higher Rates

While the Federal Reserve doesn't plan to raise rates anytime soon, money managers already have dusted off their interest-rate playbooks, Jim Cramer told his "Mad Money" viewers Thursday evening, and started selling the industrials and commodity stocks, such as Caterpillar  (CAT) - Get Report and Freeport McMoRan  (FCX) - Get Report.

Cramer's Mad Money Recap: FAANG, Microsoft, PayPal

There are still plenty of stocks left to buy, however. Cramer endorsed FAANG - his acronym for Facebook  (FB) - Get Report, Amazon  (AMZN) - Get Report, Apple  (AAPL) - Get Report, Netflix  (NFLX) - Get Report and Alphabet  (GOOGL) - Get Report, along with Microsoft  (MSFT) - Get Report.

Cramer also called out Nvidia  (NVDA) - Get Report and Advanced Micro Devices  (AMD) - Get Report as as two great stocks to own. 

While he said he would avoid the financials, Cramer said financial tech stocks, like Square  (SQ) - Get Report and PayPal  (PYPL) - Get Report have become favorites.

Facebook, Amazon, Apple, Alphabet, Microsoft, Nvidia and AMD are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.

5. -- Orphazyme Tumbles After Treatment Fails to Get FDA Clearance

American depositary receipts of Orphazyme  (ORPH) - Get Report were tumbling more than 52% in premarket trading after the Danish biotech firm turned meme stock's treatment for Niemann-Pick disease type C failed to receive approval from the Food and Drug Administration.

After the FDA said it would need further information before clearing the treatment, Orphazyme slashed its outlook, saying it expects much deeper losses this year.

“In the short-term, we will need to reduce our costs
substantially and freeze all company efforts” that aren’t related
to getting its treatment approved, the company said.

Bloomberg noted how at one point last week shares of Orphazyme jumped nearly 1,400% after getting embraced by investors on social media platforms such as Reddit.