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Federal Reserve, DraftKings, Oracle, Regeneron - 5 Things You Must Know

Stock futures are fluctuating as Wall Street awaits clues on the Federal Reserve' next policy moves; DraftKings extends losses following allegations from a short-seller.

Here are five things you must know for Wednesday, June 16:

1. -- Stock Futures Waver Ahead of Federal Reserve's Policy Decision

Stock futures were mostly lower Wednesday as Wall Street awaited the conclusion of the two-day Federal Reserve meeting in its hunt for clues on the central bank's next policy moves.

Contracts linked to the Dow Jones Industrial Average fell 54 points, S&P 500 futures fell 2 points and Nasdaq futures gained 3 points. The yield on the benchmark 10-year Treasury note dipped early Wednesday to 1.487%.

The central bank will make an announcement on interest rates Wednesday afternoon, followed by a press conference from Fed Chairman Jerome Powell.

The Fed isn't expected to take any action with respect to rates or a tapering of its $120 billion of monthly asset purchases. But Wall Street will be monitoring the meeting closely for the Fed's forecasts on inflation and any hints on when the central bank might begin pulling back on monetary stimulus. 

The Fed has said it sees higher inflation as only being temporary as the U.S. economy recovers from the coronavirus pandemic.

Economists surveyed by Bloomberg expect the Federal Reserve to reaffirm the pace of bond purchases this week, even if it delivers projections for higher rates in 2023.

"To argue that the Fed should, much less will, indicate that it is tightening any time soon is to ... ignore the temporary nature of the current adjustment-based inflation, and ignore the millions of people still out of work," said Brad McMillan, chief investment officer at Commonwealth Financial Network.

"I don’t expect the Fed to ignore any of those factors. And that means that the Fed will stand pat this week, continuing to keep buying securities to keep rates low," McMillan added.

Stocks finished lower Tuesday as the Federal Reserve began its two-day meeting, U.S. retail sales fell more than expected in May and producer prices climbed for the fifth month in a row.

2. -- Wednesday's Calendar: Fed Meeting and Housing Starts

The economic calendar in the U.S. Wednesday includes an announcement on interest rates from the Federal Reserve at 2 p.m. ET, followed by a press conference at 2:30 p.m. from Fed Chairman Jerome Powell.

The calendar also includes Housing Starts and Permits for May at 8:30 a.m., Import and Export Prices for May at 8:30 a.m. and Oil Inventories for the week ended June 11 at 10:30 a.m.

Earnings reports are expected Wednesday from Jefferies  (JEF) , Honest Co.  (HNST) , Lennar  (LEN)  and At Home Group  (HOME) .

3. -- DraftKings Extends Losses After Being Slammed by Short-Seller

DraftKings  (DKNG)  shares extended losses in premarket trading Wednesday, a day after tumbling following allegations from a short-seller that said the company's merger with Bulgaria-based SBTech opened it up to exposure linked to black-market gaming and money laundering.

Hindenburg Research said DraftKings, which went public last year via a three-way merger with special acquisition company sponsor Diamond Acquisition and SBTech, has "systemically skirted the law and taken elaborate steps to obfuscate its black market operations" as insiders "aggressively cash out amidst the market froth."

In a statement emailed to TheStreet, DraftKings said the Hindenburg report was "written by someone who is short on DraftKings stock with an incentive to drive down the share price."

DraftKings said it "conducted a thorough review" of SBTech’s business practices and "we were comfortable with the findings."

Buy the Hindenburg Dip in DraftKings Stock?

Analysts at Jefferies said they were maintaining their buy rating on shares of DraftKings pending further details following the Hindenburg report.

Jefferies' David Katz wrote in a note that matters “remain unresolved and raise a series of key questions and issues worth noting.”

Shares of DraftKings fell 0.72% to $48.16 in premarket trading Wednesday. The stock closed lower by 4.17% on Tuesday but had been down as much as much as 12% during the session.

4. -- Oracle Falls on Profit Guidance Miss

Oracle  (ORCL)  was falling in premarket trading Wednesday after the company issued a profit forecast below expectations as it ramps up its investments in cloud computing.

Adjusted earnings in the fiscal first quarter were estimated at 94 cents to 98 cents a share, below analysts' projections of $1.03.

To boost its cloud business, Oracle will double capital expenditures to almost $4 billion, said CEO Safra Catz.

“I see total revenue for fiscal 2022 growing faster than fiscal 2021, with constant currency revenue growth somewhere in the mid-single digits,” Catz said during a conference call.

“Given our increasing confidence in revenue growth and our unique and differentiated position in the market, we are going to invest back in the business at a greater rate so we can further accelerate the top line,” she added.

Oracle's revenue from cloud services and license support rose 8% in the fiscal fourth quarter to $7.4 billion, just ahead of estimates of $7.3 billion.

Oracle shares declined 4.7% to $77.80 in premarket trading Wednesday.

5. -- Regeneron Antibody Cocktail Reduce COVID Patient Deaths

An antibody cocktail from Regeneron Pharmaceuticals  (REGN)  reduced the risk of death by 20% in hospitalized patients who didn't have their own antibody response, according to results from a large British study published Wednesday.

The results suggested there would be six fewer deaths over 28
days for every 100 patients given the company’s casirivimab and
imdevimab combination of monoclonal antibodies.

The combined therapy is already authorized in the U.S. for
treating COVID outpatients at risk of developing severe
symptoms. The data reported Wednesday will be used to seek
expanded emergency use for the drug cocktail for this large
subset of hospitalized patients, Regeneron said in an email to Bloomberg.

The stock rose slightly in premarket trading to $528.