US Futures Higher After Record Session, Fed Meeting in Focus

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Principal Points

• US equity markets point to a higher open on Tuesday
• Fed comments on inflation and economic recovery on the horizon

US stock futures are trading relatively unchanged, slightly to the upside in the early trading hours of the European session. Futures tied to the benchmark indexes Dow Jones, S&P500, and the Nasdaq Composite are fairly muted after Monday’s push higher. Yesterday, the S&P500 climbed to a record close at 3,968.94 points, up 0.65% on the day. Nasdaq Composite and the Dow Jones also marched further, up by 1.05% and 0.53, respectively. The modest gains happened on the back of a slight recovery in US Treasuries, which suffered a sharp drop last week.

Investors’ attention is now set on the two-day Federal Open Market Committee meeting that concludes on Wednesday with a press conference by the Federal Reserve Chairman Jerome Powell. Mr. Powell’s comments will be monitored closely by market participants. The Fed chief will discuss the central bank’s policies, rising inflation expectations, and how to deal with a rise in borrowing costs. One of the most important questions during the press conference will be whether the Fed will push back against higher bond yields. Before Mr. Powell’s commentary, the FOMC will release its statement at 2 pm ET on Wednesday. The speech of the Federal Reserve Chairman is set for 2.30 pm ET.

The GameStop Story Continues to Evolve

Elsewhere, a few individual stocks captured the market’s attention on Monday. GameStop stock, the trendy stock of the video-game retailer, suffered a strong sell-off and had to be halted due to increased volatility. The company’s shares slid more than 15% to reach levels around $220, followed by a sharp move to the upside only to fall even lower. The buzzy stock closed down by 16.77%, or $44.36, and ended the session at $220.14.

This month, GameStop has been echoing the wild gyrations from January. Since the beginning of March, the stock has climbed over 80%, while the inception of the current run began after the Congressional hearing on Feb 18 when a few selected individuals had to testify on GameStop’s meteoric rise. The company said it will announce its fiscal fourth-quarter results next week. In pre-market trading on Tuesday, the stock remains pressured, down by another 1.70%, or $4.

Tesla has been trying to stage a comeback and has managed to erase a large chunk of its losses accumulated earlier in the month. The EV maker, led by eccentric billionaire engineer Elon Musk, ended Monday’s session up over 2%, or $14, to reach a closing price of $707.94. Tesla’s stock went through a rapid decline earlier in March when a sharp rise in bond yields prompted investors to panic-sell tech stocks. As a result, Tesla dropped over 21% in a week and dipped below $563.

The extreme volatility in the stock and the billions of dollars made and lost day in and day out do not seem to bother the man crowned as the richest person on earth. Last week, Elon Musk made $25bn in one day as Tesla stock jumped 20% on Mar 9. The unconventional executive, in his latest bout of creativity, gave himself the title “Technoking of Tesla”. In addition, Zach Kirkhorn, Tesla CFO, has been bestowed the title of “Master of Coin”. While they still hold the CEO and CFO positions, the new titles have been formalized and announced in a Tesla filing with the SEC:

“Effective as of March 15, 2021, the titles of Elon Musk and Zach Kirkhorn have changed to Technoking of Tesla and Master of Coin, respectively. Elon and Zach will also maintain their respective positions as Chief Executive Officer and Chief Financial Officer.”