Biden Spending Plan, ARK Space ETF, Voltswagen - 5 Things You Must Know

Treasury yields rise ahead of the unveiling of President Biden's infrastructure plan; Walgreens and Micron report earnings; Jim Cramer has questions about ARK's new space ETF.
Author:
Updated:
Original:

Here are five things you must know for Wednesday, March 31:

1. -- Stock Futures Are Mixed Ahead of Biden's Infrastructure Plan

Stock futures traded mixed Wednesday and Treasury yields rose as investors weighed the possibilities of higher inflation and higher taxes from a $2.25 trillion infrastructure plan that will be unveiled by President Joe Biden.

Contracts linked to the Dow Jones Industrial Average fell 30 points, S&P 500 futures rose 2 points while futures on the tech-heavy Nasdaq rose 41 points.

Biden's "American Jobs Plan" will amount to $2.25 trillion over eight years. It would be paid for over 15 years with an increase in the corporate tax to 28% from 21%, and a 21% minimum tax that will be set on global corporate earnings.

“Like great projects of the past, the president’s plan will unify and mobilize the country to meet the great challenges of our time: the climate crisis and the ambitions of an autocratic China,” the White House said in a statement before Biden’s speech Wednesday afternoon in Pittsburgh.

The president's infrastructure package includes projects for roads and bridges but also includes high-speed broadband, updates to the electrical grid and supply-chain issues. 

Ten-year Treasury yields rose for the fourth time in five days to 1.732% early Wednesday. On Tuesday, yields traded above 1.77% for the first time since January 2020. Providing a boost was a stronger-than-expected reading on U.S. consumer confidence.

U.S. oil prices edged higher to $60.66 a barrel ahead of a meeting Thursday of OPEC and its allies.

Stocks closed lower Tuesday as rising Treasury yields pressured rate-sensitive technology stocks.

2. -- Wednesday's Calendar: Walgreens and Micron Earnings, ADP Jobs Report

Earnings reports are expected Wednesday from Walgreens Boots Alliance  (WBA) - Get Report, Micron Technology  (MU) - Get Report, Dave & Buster's Entertainment  (PLAY) - Get Report, Guess  (GES) - Get Report and Verint Systems  (VRNT) - Get Report.

The U.S. economic calendar for Wednesday includes the ADP National Employment Report for March at 8:15 a.m. ET, Chicago PMI for March at 9:45 a.m., the Pending Home Sales Index for February at 10 a.m. and Oil Inventories for the week ended March 26 at 10:30 a.m.

3. -- Jim Cramer Has Questions About ARK's New Space ETF 

Jim Cramer said one look at the newly launched Ark Space Exploration and Innovation Fund  (ARKX) - Get Report "tells you all you need to know about how managers just can't resist creating new funds even if there really is no need for them."

The new exchange-traded fund debuted on Tuesday and finished down by about 1%. It was rising 0.64% early Wednesday to $20.43.

As for the new ETF, “ARK defines ‘space exploration’ as leading, enabling or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth,” according to Chief Executive Cathie Wood.

Cramer, the founder of TheStreet, noted the ETF has some genuine item companies such as Trimble  (TRMB) - Get Report, L3Harris  (LHX) - Get Report and Kratos Defense and Security Solutions  (KTOS) - Get Report.

But he also questioned why companies such as Amazon  (AMZN) - Get Report, Alphabet  (GOOGL) - Get Report and Netflix  (NFLX) - Get Report were included in the fund.

"Maybe, just maybe, you can conclude that anything works and why not? There's an expense ratio of 0.75%, so why not sling together a bunch of stocks that have something to do with space in an actively managed ETF as if Cathie Wood, the fund manager, doesn't have enough to do," Cramer wrote for Real Money.

Amazon and Alphabet 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. -- Chewy Posts Surprise Fourth-Quarter Profit

Chewy  (CHWY) - Get Report, the online retailer of pet products, posted a surprise fourth-quarter profit and the stock was rising nearly 10% in premarket trading Wednesday.

Chewy earned $21 million, or 5 cents a share, in the quarter compared with a year-earlier loss of $60.9 million. Revenue jumped 51.1% to $2.04 billion.

Analysts had expected Chewy to report a loss of 10 cents a share on revenue of $1.97 billion.

Chewy forecast fiscal first-quarter revenue of $2.11 billion to $2.13 billion, and $8.85 billion to $8.95 billion for the year. Analysts had estimated revenue of $2.07 billion for the first quarter, and $8.85 billion for the year.

"Overall, we see 2020 and the impact of COVID as much more than just a one-time growth accelerator," CEO Sumit Singh and Chief Financial Officer Mario Marte wrote in a letter to investors.

The stock gained 9.98% to $88.40 in premarket trading Wednesday.

5. -- 'Voltswagen' Was an April Fools' Joke

"Voltswagen" of America was all a joke.

Volkswagen's U.S. subsidiary said this week it would rebrand itself as Voltswagen of America as a "public declaration of the company’s future-forward investment in e-mobility.”

But a spokesman for the parent company in Germany told The Wall Street Journal the the name change was a joke and was intended as an early April Fools' Day stunt to get people talking about VW's electric car strategy and its ID.4 all-electric sport-utility vehicle.

"We didn't mean to mislead anyone," a Volkswagen spokesman told the Journal. "The whole thing is just a marketing action to get people talking about the ID.4."

Whether its Voltswagen or Volkswagen, analysts at Wedbush see the company partnering with Apple  (AAPL) - Get Report for the tech giant's oft-rumored Apple Car. 

Apple 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.