Coffee With Greta: Spirit Considers JetBlue’s Offer
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DJIA Futures: +110 (+0.3%)
SPX Futures: +9 (+0.2%)
NASDAQ Futures: +13 (+0.1%)
Good morning friends!
Futures are up as the market looks to shake off the Fed’s aggressive tightening plans.
Let’s get right to it!
Spirit Considers JetBlue’s Takeover Offer
Spirit Airlines (SAVE) shares are up 1.4% in premarket trade after the discount airline said it will begin talks with JetBlue (JBLU) about a takeover.
JetBlue offered Spirit a $3.6 billion cash buyout earlier this week.
Spirit said the JetBlue deal could likely lead to a “superior proposal” to the planned merger with Frontier (ULCC).
JetBlue’s CEO said, “We look forward to engaging with the Spirit Board to finalize our combination, to create a national low-fare challenger to the four large dominant U.S. carriers that will result in lower fares and better service for customers”.
10-Year Treasury Yield Hits Fresh 3-Year High
The 10-year Treasury yield popped over night, rising to a fresh 3-year high at 2.69%.
That yield ended last week at just 2.38% and started 2022 at 1.63%.
The recent rally in the 10-year yield has been prompted by the Fed’s aggressive plans to tighten monetary policy.
The 2-year yield is sitting at 2.52%, meaning the spread between the 10-year and 2-year is positive.
But the 30-year and 5-year yield curve remains inverted.
The 30-year yield is 2.72% while the 5-year yield is 2.76%.
Oil On Track for Losing Week
Oil prices are up this morning but headed for a losing week.
West Texas Intermediate crude futures are 0.9% higher at $97 per barrel while Brent crude futures are up 0.5% to $101 per barrel.
The U.S. Senate voted unanimously Thursday to ban all Russian oil and gas imports and revoke Russia’s most favored nation trade status with the U.S.
Both measures were sent back to the House for final approval before being sent to the President’s desk.
This move brings Congress in-line with an executive order signed by President Biden in early March.
Passing the oil ban through Congress ensures the executive order can not be undone by a future president.
Tesla Opens GigaTexas
Tesla (TSLA) shares are flat ahead of the open after the electric automaker opened its new gigafactory in Austin, Texas.
GigaTexas opened its doors with a Cyber Rodeo celebration Thursday evening.
The Austin factory is designed to produce 500,000 Tesla vehicles and is expected to be expanded in the future.
Analysts expect production of 100,000 vehicles at the location this year.
This is the second major factory Tesla has opened this year after opening GigaBerlin in late March.
GigaTexas will also serve as Tesla’s new headquarters, officially moving away from the Gigafactory in Fremont, California.
The new location is expected to create 10,000 new low-skilled jobs for the Austin economy.
The automaker also partnered with local community colleges to offer a 14-week training program for a manufacturing career at Tesla.
Consumer Credit Levels Soar
The Federal Reserve reported consumer credit in the U.S. surged in February.
Total credit rose at a seasonally adjusted annual rate of 11.3% to $41.8 billion.
That was a $32.9 billion increase from January and sharply higher than economists’ expectations for a $15 billion increase.
Revolving credit, which includes things like credit cards, surged 20.7%.
Non-revolving credit, which includes fixed-rate loans like car loans, jumped 8.4%.
In Case You Missed It
- Weekly jobless claims fell to a nearly 54-year low last week. The Labor Department reported 166,000 Americans filed initial claims. That was down 5,000 from the previous week and better than 200,000 expected. It’s the lowest level since November 1968.
- HP Inc (HPQ) shares soared to a record high Thursday after Warren Buffett’s Berkshire Hathaway (BRK.A) revealed it took a massive stake in the company. HPQ shares closed 14.8% at $40.07. SEC filings show Berkshire purchased 121 million HPQ shares earlier this week, bringing its stake to 11.4%. That makes Berkshire HP’s largest shareholder.