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Coffee With Greta: Stocks Jump As Volatility Continues


DJIA Futures: +212 (+0.7%)

SPX Futures: +32 (+0.9%)

NASDAQ Futures: +118 (+1.1%)

Good morning friends!

Futures are rebounding despite looming recession fears as volatility continues on Wall Street. 

A quick reminder the market will be closed in observance of Juneteenth on Monday, so there will be no Coffee With Greta that day.

Let’s get right to it!

Dow Bounces After Giving Up 30,000

Dow futures are rebounding after the bluechip index plunged below 30,000 on Thursday.

Wall Street gave back all, plus more, of its post-Fed rally during the session, pushing the Dow below that level for the first time since January 2021.

Reality seemed to set in after the largest Fed rate hike in 28 years, that the U.S. is unlikely to avoid a recession. 

The Central Bank’s dot plot shows more aggressive rate hikes are expected this year. 

Meanwhile, Fed Chair Jerome Powell is delivering the welcoming remarks at the Inaugural Conference on the International Roles of the U.S. Dollar in Washington, D.C. this morning. 

All three major indexes are on track for steep weekly losses.

The S&P 500 is on course for its worst week since March 2020.

Biden Insists U.S. Can Avoid A Recession

President Biden told AP Thursday that a recession is “not inevitable” as the Fed works to tackle inflation. 

Citing the 3.6% unemployment rate, Biden claimed the U.S. is “in a stronger position than any nation in the world to overcome this inflation.”

He said claims that the Democrats’ American Rescue Plan in 2021 caused inflation to get worse, calling the argument “bizarre”.

But Biden did admit the American people are “really, really down” after the pandemic, volatility in the economy, and soaring prices. 

He said, “Be confident, because I am confident we’re better positioned than any country in the world to own the second quarter of the 21st century. That’s not hyperbole, that’s a fact.”

Adobe Slips On Weak Full-Year Guidance

Adobe (ADBE) shares are down 4.4% ahead of the open despite beating Q2 expectations. 

The software maker reported adjusted earnings of $3.35 per share on $4.39 billion in revenue. 

That topped analysts’ expectations for adjusted EPS of $3.31 on $4.34 billion in revenue. 

Revenue was up 14% year-over-year. 

Adobe forecast Q3 revenue will rise to $4.43 billion with full-year 2022 revenue of about $17.65 billion. 

That’s down from its previous forecast for $17.9 billion in full-year revenue.

Gas Prices Fall Again

U.S. gas prices declined today for the third day in a row.

AAA shows the national average for regular gas dipped to $5.000/gal today, down from $5.009/gal on Thursday. 

The recent drop in prices comes as gasoline demand has pulled back a bit. 

The Energy Information Administration says U.S. demand fell to 9.09 million barrels per day from 9.2 million.

But diesel prices are still pushing to new records.

The national average for diesel jumped to $5.798/gal today from $5.786 on Thursday.

Oil Prices Dip

Oil prices are slightly lower this morning as the market continues to weigh tight supply concerns against recession fears. 

West Texas Intermediate crude futures are down 0.4% at $117 bbl while Brent crude futures are 0.1% lower at just under $120 bbl.

Prices are on track for a weekly decline following the Fed rate hike.

It would be the first weekly drop for Brent crude in five weeks and WTI crude in eight weeks.

Leading Economic Indicators Expected to Fall

Economists expect the U.S. economy softened further in May. 

The Conference Board releases its leading economic index at 10:00 a.m. ET today. 

That index is expected to fall to 0.4% after slipping 0.3% in April.

The LEI is a weighted gauge of 10 economic indicators.

One of those indicators is building permits, which plunged 7% in May. 

Another is consumer confidence, which fell 2.2 points last month.

In Case You Missed It

  • Elon Musk held a town hall meeting with Twitter (TWTR) employees on Thursday. Employees submitted questions beforehand that they wanted the Tesla (TSLA) CEO to answer. Musk emphasized his focus on free speech, building trust with employees, in-person work, and the possibility of layoffs. He said “Right now the costs exceed the revenue… Anyone who is a signification contributor has nothing to worry about.” He also set a goal of reaching 1 billion daily active users. In Q1, Twitter said it had 229 million DAUs.
  • The U.S. Global Jets ETF (JETS) tumbled 5.9% on Thursday as recession fears threaten to dent surging travel demand. American Airlines (AAL) plunged 8.6% to $12.16, its lowest level since November 2020. Southwest Airlines (LUV) hit a nearly two-year low, dropping 6% to $34.98.

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SUBRATA DAS says June 17, 2022


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