Here are five things you must know for Tuesday, May 25:
1. -- Stock Futures Rise as Inflation Fears Ease
Stock futures traded higher Tuesday as fears over rising inflation and its impact on the recovering U.S. economy eased.
Contracts linked to the Dow Jones Industrial Average were up 74 points, S&P 500 futures rose 10 points and Nasdaq futures jumped 46 points.
Though concerns over persistent inflation have softened, the recovering economy brings with it rising price pressures and fears the Federal Reserve could pull back on its extraordinary support.
But James Bullard, president of the St. Louis Federal Reserve Bank, said in an interview with Yahoo Finance that more inflation was "not really a surprise."
He said he expects price pressures from the economic rebound to be temporary, but added he sees inflation rising above 2% this year and into 2022.
Bullard also said it wasn’t time for the Fed to rethink monetary policy.
"I think there will come a time when we can talk more about changing the parameters of monetary policy. I don't think we should do it when we're still in the pandemic," Bullard said.
Stocks ended solidly higher Monday as investors focused on the strength of the U.S. economic recovery and put aside inflation worries.
2. -- Tuesday's Calendar: New Home Sales and Consumer Confidence
The U.S. economic calendar Tuesday includes New Home Sales for April at 10 a.m. ET and Consumer Confidence for May at 10 a.m.
Earnings reports are expected Tuesday from Toll Brothers (TOL) - Get Report, Nordstrom (JWN) - Get Report, AutoZone (AZO) - Get Report, Urban Outfitters (URBN) - Get Report and Zscaler (ZS) - Get Report.
3. -- Amazon Nears Purchase of MGM Studios
Amazon.com (AMZN) - Get Report reportedly is close to a deal to buy Metro-Goldwyn-Mayer Studios for almost $9 billion including debt.
The Wall Street Journal, citing people familiar with the matter, said an agreement for the Hollywood studio could be announced as early as this week, provided the talks don’t fall apart at the last minute. Bloomberg said the deal could be announced Tuesday.
Amazon's acquisition of MGM would be its second-largest acquisition after its $13.7 billion purchase of Whole Foods in 2017.
An acquisition of MGM, which has an extensive library of titles and is the company behind the "James Bond" franchise, would help bolster Amazon’s Prime streaming service and help it better compete with Netflix (NFLX) - Get Report and Walt Disney's (DIS) - Get Report Disney+.
Jim Cramer on MGM Studios Reports: Amazon 'Controls Its Own Destiny'
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4. -- Lordstown Motors Sinks After Slashing Production Plans
Lordstown Motors (RIDE) - Get Report, the electric-vehicle company, tumbled more than 13% in premarket trading Tuesday after saying production of its Endurance truck in 2021 will be half of prior expectations and it needs additional capital to execute its plans.
The stock was dropping 13.75% to $8.34 early Tuesday.
"We secured a number of critical parts and equipment in advance, so we are still in a position to ramp the Endurance, but we do need additional capital to execute on our plans," said Chairman and CEO Steve Burns in a statement. "We believe we have several opportunities to raise capital in various forms and have begun those discussions."
The company expects capital expenditures of $250 million to $275 million for the year and year-end liquidity of $50 million and $75 million, down from previous expectations of at least $200 million.
Morgan Stanley analyst Adam Jonas cut his price target on the stock to $8 from $12.
5. -- Elon Musk Asks Bitcoin Miners to Be More Transparent About Energy Use
Bitcoin prices pared gains Tuesday after Tesla (TSLA) - Get Report CEO Elon Musk called upon large Bitcoin miners to be transparent about their energy use.
In a tweet, Musk said he held a meeting with the leading Bitcoin miners in North America and asked them to publish reports on renewable usage and to ask other mining companies to do the same.
Cryptocurrencies have experienced a very volatile month, moving moving on tweets and statements by Musk, including one that said the electric vehicle company would no longer accept payments in Bitcoin.
“If the market continues to see wild swings based on Elon Musk tweets, it’s going to be a big setback for this asset class. The fact that it sees such wild swings to the tweets from one person takes away the legitimacy of the asset class,” said Matt Maley, chief market strategist for Miller Tabak.
Bitcoin was rising 0.2% to $37,076 early Tuesday, according to CoinDesk.
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