Shopify, Verizon, Tilray, Amazon and Texas Storm - 5 Things You Must Know Wednesday

Stock futures fluctuate as rising bond yields suggest investors expect inflation to increase as the economy recovers; Shopify and Tilray report earnings; Warren Buffett buys stakes in Verizon and Chevron.
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Here are five things you must know for Wednesday, Feb. 17:

1. -- Stock Futures Waver as Bond Yields Surge to One-Year High 

Stock futures fluctuated Wednesday as rising bond yields suggested investors expect inflation to increase as the economy slowly recovers from the coronavirus pandemic.

Contracts linked to the Dow Jones Industrial Average rose 17 points, S&P 500 futures were up 1 point and Nasdaq futures were down 23 points.

The yield on the 10-year Treasury rose to 1.3% from 1.29% late Tuesday, the highest level in a year.

Improved vaccine rollouts, decreasing new case counts of the virus and expectations of more U.S. stimulus have some on Wall Street believing market sentiment has become too frothy.

Citigroup strategist Tobias Levkovich said U.S. stocks could pull back by 10% as "our current caution reflects several factors, including ebullient sentiment readings, stretched valuation levels and slipping earnings revision momentum." 

Stocks finished mixed Tuesday, with the Dow closing at a record high of 31,522, up 0.2%. The S&P 500 and Nasdaq ended the session lower amid the surge in bond yields.

Stocks of energy companies rose as a deep freeze in Texas boosted power and fuel demand.

2. -- Wednesday's Calendar: Shopify and Tilray Earnings, Retail Sales

Shopify  (SHOP) - Get Report posted adjusted earnings in the fourth quarter of $1.58 a share on revenue of $977.7 million. Analysts were expecting earnings of $1.26 on revenue of $913.1 million.

Earnings are also expected Wednesday from Analog Devices  (ADI) - Get Report, Fastly  (FSLY) - Get Report, Baidu  (BIDU) - Get Report, Marathon Oil  (MRO) - Get Report, Hyatt Hotels  (H) - Get Report, Hilton Worldwide  (HLT) - Get Report, SunPower  (SPWR) - Get Report, Wingstop  (WING) - Get Report, Twilio  (TWLO) - Get Report and Tilray  (TLRY) - Get Report

The U.S. economic calendar for Wednesday includes the Producer Price Index (Final Demand) for January at 8:30 a.m. ET, Retail Sales for January at 8:30 a.m., Industrial Production for January at 9:15 a.m., the National Association of Home Builders' Housing Market Index for February at 10 a.m. and minutes from the Federal Reserve's Jan. 26-27 meeting at 2 p.m. 

3. -- Warren Buffett Buys Stakes in Verizon and Chevron, Trims Apple Holding

Warren Buffett's Berkshire Hathaway  (BRK.A) - Get Report disclosed in regulatory filings that it acquired an $8.6 billion stake in Verizon Communications  (VZ) - Get Report and a $4.1 billion stake in Chevron  (CVX) - Get Report and trimmed in stake in Apple  (AAPL) - Get Report by about 6%.

Berkshire Hathaway's stake in Apple was valued at about $120 billion at the end of 2020. The tech giant remains Berkshire's largest holding.

Berkshire Hathaway also exited its position in JPMorgan Chase JPM and reduced its stake in Wells Fargo  (WFC) - Get Report by 59%. 

Berkshire Hathaway owns about 147 million shares of Verizon, a stake Yahoo Finance valued at about $8.6 billion at the end of last year, making it the sixth largest position in the Berkshire Hathaway portfolio.

Verizon was rising 3.79% in premarket trading Wednesday to $56.20.

Apple, JPMorgan Chase and Wells Fargo 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.

4. -- Oil Prices Hold Higher Amid Texas Storm

Brent crude oil, the global benchmark, traded above $64 a barrel Wednesday as a deep freeze in Texas has forced the shutdown of U.S. refineries and oil wells.

Occidental Petroleum  (OXY) - Get Report, the second-largest producer of oil in the Permian Basin, told buyers it would be forced to curtail oil deliveries from the region, while Chevron shut in some wells in the Permian.

Production in Permian Basin in Texas - America’s biggest oil field - has plummeted by as much as 65%, according to a report from Bloomberg.

Total U.S. oil production has plunged by one-third - the most ever - as the cold blast freezes well operations across the central U.S., Bloomberg reported, citing traders and industry executives with direct knowledge of the operations.

Crude output now has fallen by about 3.5 million barrels a day or more nationwide, they told Bloomberg. Before the cold snap, the U.S. was pumping about 11 million barrels a day.

West Texas intermediate crude, the U.S. benchmark, rose 0.92% to $60.60 a barrel early Wednesday.

5. -- Amazon Sued by New York for Lax Safety During Pandemic

Amazon.com  (AMZN) - Get Report was sued by New York's attorney general, who accuses the online retailing giant of failure to comply with safety rules during the pandemic and of retaliating against warehouse workers who raised concerns.

"Throughout the historic pandemic, Amazon has repeatedly and persistently failed to comply with its obligation to institute reasonable and adequate measures to protect its workers from the spread of the virus in its New York City facilities," New York state Attorney General Letitia James wrote Tuesday in a complaint filed in state Supreme Court.

Amazon last week sued New York, claiming the attorney general's office overstepped its authority in seeking to penalize the company for what it viewed as pandemic safety protocol failures. 

“We care deeply about the health and safety of our employees, as demonstrated in our filing last week, and we don’t believe the Attorney General’s filing presents an accurate picture of Amazon’s industry-leading response to the pandemic,” Amazon spokeswoman Kelly Nantel said in an emailed statement to Bloomberg.

Amazon last week said it "has been intensely focused on COVID-19 safety and has taken extraordinary, industry-leading measures grounded in science, above and beyond government guidance and requirements, to protect its associates from COVID-19."

Amazon is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stock? Learn more now.