GameStop, Cleveland-Cliffs, Chewy, RH, Inflation: 5 Things You Must Know

Stock futures waver as traders await the latest data on U.S. consumer prices; GameStop tumbles on plans to sell 5 million shares; Chewy reports earnings; Cleveland-Cliffs soars amid meme stock frenzy.
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Here are five things you must know for Thursday, June 10:

1. -- Stock Futures Fluctuate Ahead of Inflation Data

Stock futures wavered Thursday as traders awaited the latest data on U.S. consumer prices to help them determine whether the Federal Reserve might soon begin discussing pulling back on its market-supporting policies. 

Contracts linked to the Dow Jones Industrial Average rose 69 points, S&P 500 futures gained 2 points and Nasdaq futures fell 42 points.

Data on consumer prices for May will be released Thursday before the start of trading. A slide below 1.5% for the yield on the benchmark 10-year Treasury indicated investors have begun supporting the Fed's belief that any spikes in inflation will be transitory as the economy recovers from the COVID-19 pandemic.

“Investors are of the view that the current inflationary
pressure is transitory,” said Ann-Katrin Petersen, Allianz Global
Investors investment strategist, on Bloomberg TV. “They
expect the U.S. Federal Reserve to remain expansionary for the
time being.”

The Federal Reserve's policy-setting body, the Federal Open Market Committee, will be meeting next week.

Top U.S. and Chinese commerce officials, meanwhile, agreed in a phone call Thursday to push forward trade practices and cooperate over differences

Stocks moved lower Wednesday as Wall Street prepared for Thursday's release of the latest inflation data.

2. -- GameStop Slumps on Plans for Stock Sale

GameStop  (GME) - Get Report posted a narrower-than-expected first-quarter loss and added two former Amazon  (AMZN) - Get Report executives to key leadership roles, but the stock tumbled after the video game retailer unveiled plans to sell another 5 million shares in order to raise further capital.

GameStop shares fell 6% in premarket trading Thursday to $284.53

The video game retailer also said it received a request from the Securities and Exchange Commission in late May for a "voluntary production of documents" linked to an ongoing investigation concerning "trading activity."

"We are in the process of reviewing the request and producing the requested documents and intend to cooperate fully with the SEC staff regarding this matter," GameStop said. "This inquiry is not expected to adversely impact us."

Matt Furlong, who was in charge of Amazon's Australia business, will take over as CEO of GameStop on June 21. Mike Recupero, who most recently was Amazon’s chief financial officer for the North American Consumer business, starts as financial chief next month. 

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3. -- Thursday's Calendar: Consumer Price Index, Chewy Earnings

The U.S. economic calendar on Thursday includes the Consumer Price Index for May at 8:30 a.m. ET. Economists surveyed by FactSet expect consumer prices to have risen 0.4% in May, following April's surge of 8%. Year over year, consumer prices are predicted to have jumped 4.6% from 4.2%.

The calendar also includes weekly Jobless Claims at 8:30 a.m.

Earnings reports are expected Thursday from Chewy  (CHWY) - Get Report, Dave & Buster's Entertainment  (PLAY) - Get Report and Signet Jewelers  (SIG) - Get Report.

4. -- RH Jumps on Boost in Revenue Guidance

Shares of RH  (RH) - Get Report, the former Restoration Hardware, rose sharply after the home furnishings retailer topped analysts' estimates for first-quarter earnings and boosted its forecast for the year.

The stock was up 7.57% to $657.59 in premarket trading Thursday.

RH said it expects fiscal-year revenue to rise 25% to 30%, higher than its previous calls for growth of 15% to 20%. The company also said it expects adjusted operating margin in the range of 23.5% to 24.3%, "an increase of 170 to 250 basis points vs our prior outlook.”

For the current second quarter, RH expects revenue to jump 35% to 37% from $709 million a year earlier.

The company cited several factors for its continued optimism including "a strong housing and renovation market, both with pent up demand and a long tail, a record stock market, low interest rates and the reopening of several large parts of our economy."

5. -- Cleveland-Cliffs Surges Amid Meme Stock Frenzy

Cleveland-Cliffs  (CLF) - Get Report shares extended gains in premarket trading Thursday but only after soaring nearly 15% during the previous session as the steelmaker got caught up in the meme-stock frenzy.

The stock was up 5.47% early Thursday to $24.49.

Cleveland-Cliffs soared Wednesday as discussions took place on Reddit forum WallStreetBets and other social media platforms about a short squeeze in the stock. Traders claimed the stock was being shorted and that it was undervalued at a time when steel prices have been rising and wait times for big steel orders are longer due to shortages. 

The price of steel has jumped in recent months, trading at nearly triple its 20-year average.