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U.S. stock futures edged up Thursday morning as investors awaited critical inflation figures due later in the session. AMC shares rallied after completing an equity offering, while automakers faced a potential strike deadline.
Futures tied to the S&P 500 gained 0.2%, signaling a modestly positive open. The broad market index is coming off its worst day in nearly two weeks after hotter-than-expected wholesale inflation data stoked worries about more aggressive Fed rate hikes.
Investor focus now turns to the August Consumer Price Index reading, due out at 8:30 am ET. Economists expect the headline CPI to show an 8.1% year-over-year increase, marking a slight cooling from 8.5% in July.
The core CPI, which excludes food and energy, is seen slowing to 6.1% from 5.9%. Cooling inflation may give the Fed confidence to ease up on its monetary tightening campaign.
AMC Stock Pops as Theater Chain Sells New Shares
AMC Entertainment shares jumped 8% in premarket trading after the movie theater operator said it completed an at-the-market equity offering, selling around 40 million shares at an average price of $8.14 to raise $325 million.
AMC has frequently issued new shares over the past year to raise cash and fund operations amid a slow recovery at the box office. Revenue still remains below pre-pandemic levels.
The additional shares may dilute existing shareholders, but provides AMC with a cash cushion as it pays down debt and invests to upgrade its theaters.
Penn National Gains on Deutsche Bank Upgrade
Deutsche Bank upgraded shares of Penn National Gaming to a short-term “buy” rating, citing an attractive setup for the stock in the near-term. Penn operates retail sports betting and online gaming platforms.
Analyst Carlo Santarelli believes Penn’s stock should see upside into the close of 2022 and through early 2023 based on current valuation. Shares trade at just 9.5 times Deutsche’s 2023 EBITDA forecast versus 12.5 times for casino peers.
The upgrade sent Penn 3% higher in premarket action. Deutsche also named Penn a top pick in the interactive gaming space given its upside potential.
Potential UAW Strike Looms Over Auto Stocks
General Motors and Ford shares edged up slightly in early trading, even as the automakers face a potential United Auto Workers strike threat if they cannot reach a new four-year labor deal by a Thursday night deadline.
UAW President Ray Curry said a walkout is likely without an agreement. The union is seeking to recoup concessions it made when the car companies were struggling financially during and after the Great Recession.
Ford CEO Jim Farley claims the company has received no “genuine counteroffer” to its proposals. A strike could hamper vehicle production and deliveries. The auto giants and UAW will aim to avert a work stoppage that could damage profits.
Etsy Rises Following Upgrade to Outperform
Wolfe Research upgraded its rating on Etsy to Outperform from Peer Perform, boosting the stock 5% in premarket trading. Analyst Deepak Mathivanan cited three reasons for the brighter outlook.
First, consumer discretionary spending appears to be rebounding, which should lift sales of Etsy’s specialty crafts and artwork. Second, Etsy has opportunities to expand profit margins. Finally, Mathivanan believes the company is refocusing on its core Etsy marketplace after ill-fated acquisitions.
The upgrade comes even as analysts broadly expect weaker e-commerce demand in 2023 as shoppers return to physical stores. An emphasis on Etsy’s niche may help it stand out.
Stocks appeared on track for a positive open ahead of key inflation data that could impact the Fed’s monetary policy stance. Easing price pressures may limit further rate hikes.
AMC shares rallied after raising $325 million through a discounted equity offering.Meanwhile, automakers faced a potential UAW strike if no deal is reached. Etsy gained on an upgrade citing a focus on its core franchise.
With uncertainty still elevated, investors are hoping for signs of peaking inflation to restore confidence. We’ll have all the market coverage and analysis you need. Thank you for following today’s premarket stocks making the biggest moves.