Wednesday Morning Rebel Brief — Biden: Suspend the Gas Tax

Stocks are trading lower this morning, erasing some of the gains made in yesterday’s rally. The S&P and the Nasdaq are both trading 1.7% lower, and the Dow Jones Industrial Average is trading 1.3% lower in the premarket. 

Let’s have a look at what’s moving markets today.

Biden Asks Congress to Suspend Gas Tax Ahead of Midterm Elections

President Biden is making another attempt at stemming the high price of gas by urging congress to suspend the gas tax (worth 18 cents) for the next three months — essentially until midterm elections. He’s also asking states to do the same and suspend their own gas taxes. 

According to Goldman Sachs analyst Jeff Currie, this is actually bullish for energy, although this morning, it doesn’t look like the market agrees. WTI Crude is trading lower by more than 5.5%, and Natural Gas is lower by more than 2%, with most energy stocks (including Exxon, Chevron, and Valero) following suit. 

Powell Speaks Before the Senate

Powell will be addressing the senate this morning to talk about inflation, and the Fed’s efforts to stem it. Then on Thursday, Powell will address the House Financial Services Committee. This is a semi-annual address that Powell has plenty of experience navigating. Despite the congressional grilling, Powell typically does a good job sticking to Fed talking points and evading the tough-talking senators. 

Has Anyone Seen Revlon (REV) Lately?

Despite being expected to post big loss in their upcoming earnings report, and despite filing for Chapter 11 bankruptcy, shares of Revlon are on the move — surging 91% on Friday, 62% on Tuesday, and 30% in Wednesday’s premarket. This is on news that Reliance Industries is considering a takeover on the brand. 

La-Z-Boy (LZB) Posts Upside Earnings Surprise

La-Z-Boy is trading higher this morning by more than 7% after posting record sales. The furniture company beat EPS expectations by 16.3% and beat revenue expectations by 3.1%. The company said it’s main focus was on reducing its backlog and improving lead times.

Winnebago (WGO) Follows La-Z-Boy’s Lead — Posts Top and Bottom Line Beat

High gas prices aren’t hurting this company. Winnebago, the maker of RV’s, Class-B vehicles, and micro-trailers posted an EPS beat of 7.85% and a Revenue beat of 5.75%. The company said they were able to pass prices onto the consumer, allowing them to stem the tide of inflation and greatly improve their profit margins. The stock rose by more than 3.5% in the premarket before giving back roughly half of those gains.

For more quick takes on this morning’s market-moving news, check out 60 Seconds With Jon Najarian!

https://twitter.com/jonnajarian/status/1539593003354005506

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