The major averages are mixed at midday, with the S&P and Dow lower and the Nasdaq higher, ahead of today's FOMC announcement. The Fed is set to leave its 0%-0.25% rate band intact and almost assuredly will reiterate its "lower-for-longer" posture. After Friday's blowout jobs report, analysts suspect Fed Chair Jerome Powell will want to convey a cautiously optimistic view, versus his more downbeat tone in April.
ECONOMIC EVENTS: In U.S. data, the Consumer Prices Index fell 0.1% in May, with the core rate down 0.1% as well, which undershot estimates.
The Federal Reserve's FOMC began its meeting and will announce its rate decision at 2 pm ET. That will be accompanied by the quarterly projections, and will be followed at 2:30 ET by Chair Powell's press conference.
TOP NEWS: Shares of Grubhub (GRUB) are fractionally higher near midday following news that the company and European food delivery service operator Just Eat Takeaway.com (TKAYY) are in advanced discussions regarding an all-share combination. Just Eat Takeaway.com confirmed the talks following press speculation, including reports from both CNBC and The Wall Street Journal that Grubhub's previous deal talks with Uber (UBER) had hit an impasse.
In other M&A news, Simon Property Group (SPG) announced that it has exercised its contractual rights to terminate its merger agreement with Taubman Centers (TCO). Simon argues that Taubman's business has been disproportionately hurt due to the COVID-19 pandemic when compared to the rest of the retail real estate industry, while also alleging that Taubman "has breached its obligation to operate its business in the ordinary course." In midday trading Taubman shares are down 21%, while Simon's stock is down 2%.
Starbucks (SBUX) shares are down 4% near noon after the coffee giant issued an update on its current operating trends and financial expectations for the quarter and the year. Stephens analyst James Rutherford noted that the company's full-year guidance for same-store sales to be down 10%-20% in the Americas compares to the consensus forecast of down 13%. While sales are recovering, the company noted there will continue to be disruption for the rest of the year and its below-consensus adjusted EPS guidance accounts for a higher flow-through of lost revenues due to partner support and additional pandemic-related costs, noted Rutherford. Starbucks also previewed plans to "reposition" its Americas store base, which will include the closure of up to 400 company-operated stores over the next 18 months in conjunction with the opening, over time, of a greater number of new stores in different locations and with "innovative store formats."
Shares of Tesla (TSLA) topped $1,000 for the first time today as CEO Elon Musk is reported to have told his team that it is time to bring the company's Semi truck to volume production. Nikola Motors (NKLA), which is also working on producing electric and hydrogen fuel cell powered trucks, has seen its stock pull back amid the report following a furious run-up in recent days.
MAJOR MOVERS: Among the noteworthy gainers was Five Below (FIVE), which rose 11% and was upgraded to Buy from Hold by Gordon Haskett analyst Chuck Grom after the retailer reported Q1 results and gave an updated on the performance of reopened stores in Q2. Also higher AMC Entertainment (AMC), which gained 11% after reporting quarterly results and stating that it currently expects to have it theaters fully open globally in July.
Among the notable losers was Hertz (HTZ), which fell 29% after the company confirmed that it received a letter from the staff of NYSE Regulation that it had determined the company is "no longer suitable for listing" and the exchange will commence proceedings to delist the common stock of the company from the New York Stock Exchange. Also lower was Guess (GES), which fell 18% after reporting quarterly results and providing its own COVID-19 business update.
INDEXES: Near midday, the Dow was down 159.91, or 0.59%, to 27,112.39, the Nasdaq was up 48.10, or 0.48%, to 10,001.86, and the S&P 500 was down 10.19, or 0.32%, to 3,196.99.
Use JTKWY
-0.01 (-0.02%)
Uber
-1.54 (-4.22%)
Starbucks
-3.56 (-4.32%)
Simon Property
-2.55 (-2.96%)
Bought by SPG
-9.845 (-21.78%)
Tesla
+71.34 (+7.58%)
Nikola
-8.06 (-10.13%)
Just Eat Takeaway.com
+ (+0.00%)
Five Below
+11.125 (+10.67%)
AMC Entertainment
+0.62 (+10.35%)
Hertz
-1.18 (-27.83%)
Guess
-1.71 (-13.98%)