5 things to know before the stock market opens Thursday
Here are the most important news, trends and analysis that investors need to start their trading day:
- AMC mania captivates Wall Street, company to sell more shares
- Short sellers of AMC shares lost $2.8 billion in one day
- Bond yields inch higher ahead of two jobs reports
- Largest meat producer getting back online after cyberattack
- Activist firm Engine No. 1 claims third Exxon board seat
1. AMC mania captivates Wall Street, company to sell more shares
U.S. stock futures fell Thursday after another muted day in the broader market belied the incredible trading in meme stock AMC Entertainment. In Thursday's premarket, AMC erased most of an early 20% surge, turning lower at one stage, after the movie theater chain filed to sell 11.55 million shares "from time to time." AMC shares skyrocketed 95% on Wednesday, bringing their year to date gains to more than 2,800%.
Focusing on the link between inflationary pressures and the reopening of U.S. businesses after Covid, the Dow Jones Industrial Average, S&P 500 and Nasdaq posted modest gains Wednesday. The Dow and S&P 500 were less than 1% shy of their May record closes, while the Nasdaq was 2.7% away from its late April record close.
2. Short sellers of AMC shares lost $2.8 billion in one day
The Reddit-fueled retail trader war on those betting against AMC, similar to January's GameStop mania, cost short sellers $2.8 billion on Wednesday alone, according to S3 Partners. About 18% of the AMC shares available for trading were still sold short through Wednesday. Most Wall Street analysts still believe AMC shares will plummet eventually. The average 12-month target price was $5.11, according to FactSet. AMC closed out 2020 at $2.12 per share.
3. Bond yields inch higher ahead of two jobs reports
The 10-year Treasury yield ticked higher to just above 1.6% ahead Thursday's weekly initial jobless claims data and the ADP's monthly look at hiring at U.S. companies, which was delayed one day due to the Memorial Day holiday. At 8:15 a.m. ET, private sector jobs are seen growing by 680,000 in May compared with 742,000 April additions. At 8:30 a.m. ET, initial jobless claims for last week are seen dropping to another pandemic-era low of 393,000. The government releases its May employment report on Friday.
4. Largest meat producer getting back online after cyberattack
Brazil's JBS, the largest meat processor in the world, has resumed most production after a weekend cyberattack. However, experts warned that the vulnerabilities exposed by this breach and others are far from resolved. JBS blames hackers with ties to Russia. Last month, Colonial Pipeline, the largest U.S. fuel pipeline, paid ransomware demands after its operations were closed for nearly a week. Hackers with ties to Russia are also suspected in that attack. Following media reports Wednesday, New York City's Metropolitan Transportation Authority acknowledged a cyberattack in late April with suspected ties to China.
5. Activist firm Engine No. 1 claims third Exxon board seat
Engine No. 1 has won a third board seat at Exxon. The upstart activist firm has been targeting the oil giant since December, pushing the company to shift its focus away from fossil fuels. Engine No. 1, which has a miniscule 0.02% stake in Exxon, nominated four directors ahead of the firms' annual shareholder meeting at the end of May, a move that garnered support from major state pension funds. Last week's vote followed months of back-and-forth between Engine No. 1 and Exxon.
— The Associated Press contributed to this report. Follow all the market action like a pro on CNBC Pro. Get the latest on the pandemic with CNBC's coronavirus coverage.
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