Here are five things you must know for Wednesday, Aug. 11:
1. — Stock Futures Dip Ahead of Inflation Data
Stock futures traded mostly lower Wednesday as traders awaited U.S. inflation data they hope will provide them with a clearer sense of Federal Reserve policy.
Contracts linked to the Dow Jones Industrial Average rose 16 points, S&P 500 futures were down 3 points and Nasdaq futures declined 27 points. The Dow and the S&P 500 closed at record highs Tuesday.
The yield on the benchmark 10-year Treasury rose Wednesday to 1.366% ahead of data that are expected by economists to show that inflation rose 5.3% in July from a year earlier. The pace in June was 5.4%.
“A higher-than-expected reading may suggest inflation being more persistent and increase the risk of an earlier tapering timeline from the Fed,” said IG market strategist Jun Rong Yeap.
Fed officials have been discussing in recent days just when the central bank might begin its tapering of bond purchases. The Fed has been buying $120 billion a month in Treasury, agency and mortgage bonds to keep interest rates low and support the economy during the pandemic.
Atlanta Federal Reserve Bank President Raphael Bostic said earlier this week that the Fed’s tapering of bond purchases could begin in the fourth quarter. Chicago Fed President Charles Evans, however, said Tuesday he wasn’t yet ready to support pulling back stimulus and would first “like to see a few more employment reports.”
The central bank has said it expects to keep rates near zero until the labor market reaches “maximum employment” and inflation runs above its 2% target.
Senate Democrats, meanwhile, passed a $3.5 trillion budget framework, a day after the Senate approved a $1 trillion bipartisan infrastructure package.
2. — Wednesday’s Calendar: Consumer Price Index, NIO Earnings
The economic calendar in the U.S. Wednesday includes the Consumer Price Index for July at 8:30 a.m. ET. Economists surveyed by FactSet expect consumer prices in July to have risen 0.5%, or 0.4% excluding food and energy costs. The annual CPI rate is forecast to have increased 5.3%.
Oil inventories for the week ended Aug. 6 will be released at 10:30 a.m.
Earnings reports are expected Wednesday from NIO (NIO) – Get Report, Coupang (CPNG) – Get Report, eBay (EBAY) – Get Report, Applovin (APP) – Get Report, Bumble (BMBL) – Get Report, Wendy’s (WEN) – Get Report and Vroom (VRM) – Get Report.
NIO Earnings Are on Tap – Will the Stock Rally as Tesla Did?
3. — Nucor Extends Gains After Passage of Infrastructure Bill
Shares of steelmaker Nucor (NUE) – Get Report extended gains early Wednesday after the Senate approved a $1 trillion infrastructure plan.
TheStreet’s Jim Cramer asked Leon Topalian, president and CEO of Nucor, exactly what the infrastructure bill means for the U.S. economy.
Topalian told Cramer’s “Mad Money” viewers Tuesday night that America hasn’t had a meaningful infrastructure investment in decades, making Tuesday’s passage of the bill a big deal. The U.S. must invest in order to stay competitive, he said, and the pandemic only proved how important it was to make products in the country.
Cramer’s Mad Money Recap: Nucor and the American Economy
The infrastructure bill is about a lot more than just roads and bridges, Topalian added, it’s about investing in American manufacturing. The CEO said Nucor was ready and able to provide the steel America needs.
When asked by Cramer why Nucor shares trade at just six times earnings, Topalian said the stock is worth a lot more than it trades for, which is why the company has aggressively been buying back stock and remains focused on shareholder returns.
Nucor rose 2.84% to $121.45 in premarket trading Wednesday. The stock gained 9.58% on Tuesday.
Nucor is a holding in Jim Cramer’s Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells NUE? Learn more now.
4. — Coinbase Earnings Beat Estimates
Shares of Coinbase Global (COIN) rose in premarket trading Wednesday after the largest U.S. cryptocurrency exchange topped second-quarter earnings and sales estimates.
Revenue in the quarter jumped to $2 billion from $178 million a year earlier.
Coinbase said monthly transacting users jumped to 8.8 million, up 44% from the first quarter. Trading volume rose to $462 billion from $335 billion.
The value of assets on Coinbase’s platform declined to $180 billion from $223 billion as Bitcoin prices fell from all-time highs.
The company said it expects lower monthly transacting users and lower trading volumes during the third quarter.
“It’s going to be bumpy,” Coinbase President and Chief Operating Officer Emilie Choi told Bloomberg TV. “And that’s actually the way that we built the business. We’re used to the volatility. We embrace the volatility.”
The stock was rising 1.86% to $274.68 in premarket trading.
5. — NortonLifeLock to Buy Cybersecurity Company Avast for More Than $8 Billion
NortonLifeLock (NLOK) – Get Report agreed to acquire Czech Republic-based cybersecurity company Avast for cash and stock in a deal valued at more than $8 billion.
Under terms of the merger, Avast’s shareholders would receive a combination of cash consideration and newly issued shares in the Tempe, Ariz.-based consumer cyber safety company.
Based on NortonLifeLock’s closing share price of $27.20 on July 13, the merger values the transaction at between $8.1 billion and $8.6 billion, depending on the elections of shareholders of Prague-based Avast, according to a statement from the companies.
“This transaction is a huge step forward for consumer cyber safety and will ultimately enable us to achieve our vision to protect and empower people to live their digital lives safely,” said NortonLifeLock CEO Vincent Pilette.
NortonLifeLock shares rose 5.18% to $25.40 in after-hours trading on Tuesday.
NortonLifeLock 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.