Black Friday Sale! Save huge on InvestingProGet up to 60% off

Retail sales ahead, Tesla's legal fight over Musk pay deal - what's moving markets

Published 06/18/2024, 03:28 PM
© Reuters

Investing.com -- U.S. stock futures were broadly flat on Tuesday following a rally on Wall Street in the previous session that brought the S&P 500 and Nasdaq Composite up to new record-high closing levels. Monthly retail sales figures are due to be a key focus for investors, as they attempt to assess the state of the U.S. economy. Tesla (NASDAQ:TSLA) begins a legal fight in Delaware over CEO Elon Musk's historic $56 billion pay package after the electric vehicle group's shareholders widely backed the compensation deal last week.

1. Futures broadly flat

U.S. stock futures hovered around the flatline on Tuesday, as traders prepared for the release of key retail sales data.

By 03:13 ET (07:13 GMT), the Dow futures contract had edged higher by 30 points or 0.1%, while the S&P 500 futures and Nasdaq 100 futures were both widely unchanged.

The main averages on Wall Street jumped in the prior session, with the benchmark S&P 500 and tech-heavy Nasdaq Composite posting fresh record closing highs. Sentiment was boosted by analysts at Goldman Sachs and Evercore ISI both raising their year-end targets for the S&P 500.

In individual stocks, shares in Apple (NASDAQ:AAPL) extended a rally that began last week after the iPhone-maker unveiled a raft of artificial intelligence-enhanced features at its annual developers conference.

Meanwhile, the Philadelphia SE Semiconductor index, which tracks shares of chipmaking firms, touched an all-time peak, reflecting ongoing enthusiasm around the applications of AI. U.S.-listed shares in Taiwan Semiconductor Manufacturing Company -- the world's biggest contract chip supplier -- climbed 5.4%, while memory chip company Micron (NASDAQ:MU) also advanced following price-target upgrades by brokerages.

2. Retail sales ahead

The momentum of U.S. consumer spending is projected to have sped up in May, pointing to resilience in a crucial section of the American economy.

Economists expect that retail sales grew by 0.3% on a month-on-month basis. The number would be an acceleration from 0.0% in April, when expenditures on many goods were tempered by elevated gasoline prices.

Despite facing headwinds from sticky inflation and a steep uptick in interest rates, U.S. sales have largely remained strong thanks in part to a solid labor market. Consumers have chosen to focus much of their spending on essential items in response to these pressures, foregoing many purchases on pricier luxury goods.

The data may provide more insight into the state of the overall economy, which could impact how the Federal Reserve approaches potential interest rate reductions later this year.

On Monday, Philadephia Fed President Patrick Harker backed one 25-basis point cut in 2024, citing signs of easing but above-trend economic activity, some slackening in labor demand, and an ongoing slowdown in inflation. His comments echoed a median rate forecast for the rest of the year that was released by policymakers on Wednesday.

3. Tesla opens legal fight in Delaware to reinstate Musk pay package

Tesla has initiated its battle for legal recognition of Chief Executive Elon Musk's massive $56 billion pay package after the electric carmaking giant's shareholders voted in favor of the compensation agreement.

Delaware judge Kathaleen McCormick (NYSE:MKC) previously voided the pay earlier this year, calling the amount -- a record in U.S. corporate history -- "unfathomable" and raising doubts around the independence of the company's board.

But Musk's deal, as well as a plan to reincorporate Tesla in Texas from Delaware, received the support of 77% of the shareholder votes cast last week, according to a regulatory filing.

In a letter made available to the public on Monday, Tesla attorneys argued that the shareholder decision "significantly impacts" McCormick's prior ruling.

However, Greg Varallo, a shareholder attorney against the pay package, said the ratification had "no legal effect" on the case, Reuters reported.

4. Apple scraps "buy now, pay later" scheme

Apple has scrapped its "buy now, pay later" (BNPL) service in the U.S., bringing an end to the offering only a little over a year after it was first announced.

The California-based group's "Apple Pay Later" allowed users to purchase items in installments, rather than buying them in one up-front sum. The move, which was initially unveiled last March, was viewed as a push by Apple into a financial services space dominated by companies like Klarna and Affirm.

But Apple said it was now focusing on providing access to installment loans through third-party credit, debit cards and lenders. Apple said "the solution will enable us to bring flexible payments to more users, in more places across the globe."

Customers with open loans on Apple's BNPL service will still be able to manage and pay for them via its Wallet app, the company said.

5. Oil dips

Crude prices edged lower Tuesday, handing back some of the previous session’s gains, as the global demand outlook remains uncertain amid plentiful supply.

By 03:11 ET, the U.S. crude futures (WTI) traded 0.2% lower at $79.56 per barrel, while the Brent contract dropped 0.2% to $84.09 a barrel. Both benchmarks added around 2% on Monday, closing at their highest since April.

Data released earlier this week showed that China, the world’s largest crude importer, was struggling to produce a solid economic recovery. Meanwhile, worries persist that the U.S. economy's prolonged exposure to high interest rates could weigh on crude demand in the world's biggest oil consumer.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.