Author: Peter Nurse
Investing.com – AMC Entertainment continues to experience surprising gains. However, crude oil and Wall Street paused their last positive run before the data flood, led by US jobless claims numbers. On the other hand, the electric car market has a famous supporter.
Here are five developments that will move the markets on Thursday, June 3:
1. AMC Entertainment is advancing and rising
It looks like AMC Entertainment (NYSE:) won’t stop. Shares of the movie theater chain, the new darling of the Reddit community, are pointing to solid premarket gains. Where has it doubled in value in Wednesday’s session, gaining more than 400% in the last two weeks alone.
Its market cap rose to $33 billion during this period, surpassing other so-called headline stocks – not bad for a company that was on the verge of bankruptcy earlier in the year.
But distributing popcorn and pretending to do special screenings didn’t change the economic reality surrounding the company.
As of the first quarter of this year, the epidemic has increased the company’s long-term debt levels to $5.4 billion, from under $2 billion in 2016. And it continues to lose money. Analysts expect it to rise another $100 million over the next 12 months.
As the US fully reopens, customers can come back and the new AMC Investor Connect initiative can help with margins, but there’s good reason to think the pandemic has permanently changed viewing habits. The media giants who spend huge sums on purchasing streaming services certainly think so.
AMC’s spectacular rise has certainly earned pre-buy investors, but how long can it last?
2. Stocks will decline
US stock markets, which made a weak start to the new month, will open lower before important economic data.
It fell by 60 points to just over 34,500 and fell 0.2%.
Major indexes closed with small increases on Tuesday. rose only 0.1%, it rose 25 points and technology-heavy 0.1%.
While these averages continue to be close to record highs, the market lost much of its previous momentum amid concerns that a stronger-than-expected economic recovery will push inflation further, leading to an earlier tightening in monetary policy.
Names like DocuSign (NASDAQ:), Slack Technologies (NYSE:), Athletica (NASDAQ:), and Broadcom (NASDAQ:) will report on Thursday. But most of the attention will be in headline stocks such as AMC Entertainment, Bed Bath & Beyond (NASDAQ:) and Workhorse (NASDAQ:), which continue to rise.
3. Data flood
The US economic data front is packed. Signs of high inflation will also be sought, as well as new clues to the pace of recovery.
The first data is the employment report, which is expected to show that 650,000 jobs were created in the private sector of the economy in May. In April, this reading came in at 742,000.
In 15 minutes, the weekly will come. For the week ending May 28, 390,000 applications are expected – a good improvement from the previous week of 406,000 and a new post-pandemic low.
Ahead of the release on Friday, these data will be watched carefully, especially after the disappointing April with 266,000 non-farm jobs.
“We expect employment data to be stronger … compared to April (current estimate 672,000), with a decline in initial jobless claims pointing to a monthly increase of possibly 1.5-2 million,” Nordea analysts said.
In addition, the May reading will be shared and is expected to show that trust has been restored in the most important sector, service. It can also indicate increased wage pressure.
The news from Europe is positive: the eurozone rose in May as the easing of restrictions brought life to the dominant service sector.
On the other hand, UK bars and restaurants recorded the biggest increase in 24 years last month after resuming indoor service.
4. Crude oil takes a break
Crude oil prices fell on Thursday. Investors realized their gains in the market, which rose to record levels amid growing optimism about a strong recovery in demand from China, the USA and Europe.
It fell 0.2% to $68.69 after climbing to its highest level since October 2018. On the other hand, after closing above $70 for two consecutive days for the first time in two years, it was traded at $71.22, down 0.2%.
Confidence is growing that demand will increase in the second half of the year as oil-consuming countries are fully opened.
Earlier this week, Saudi Energy Minister Prince Abdulaziz bin Salman said the demand picture was showing signs of improvement after the OPEC+ meeting. Fatih Birol from the International Energy Agency also stated that he saw a strong recovery in consumption in the next six months.
After a major loss of demand due to the epidemic last year, this rebalancing will be led by increased fuel demand in China and, in particular, the rise in vehicle consumption this summer in the United States, the world’s largest oil user, with the UK coming out of quarantine.
Its report, shared on Wednesday, showed a decrease of 5,360 million barrels last week – well above the 439,000 barrels recorded in the previous week.
Investors’ eyes are now on the US (EIA) report.
5. Famous supporter of electric cars
The electric car market gained a famous backer on Thursday. It has been announced that football star David Beckham has acquired a 10% stake in Lunaz, a UK-based auto restoration and electrification company.
The value of the deal was not disclosed, but Beckham will join Lunaz’s founders and the Barclay, Reuben and Dellal families as a shareholder, the company announced on Thursday.
In Europe, the industry is making steady progress, with European consumers purchasing more than half a million electric cars for the first time in 2020 despite the pandemic. This is expected to double to one million sales by 2021.
Germany was by far the largest single market with 64,700 sales in the first quarter of 2021, while the UK surpassed France in the first quarter of the year to become Europe’s second largest electric car market.
Of course, these numbers still dwarf those of conventional fuel-powered cars, but the trend is clear. Last year, Norway became the first country to sell more electric cars than fossil fuel cars, thanks to generous subsidies.