Feeling the weekend

Markets struggled to find direction yesterday, with stocks jumping earlier in the session, but closing just below the flatline. "Low volatility, flat equities, declining U.S. Treasury yields, and low trading volumes - feels a lot like a Tuesday during a pre-holiday week," Goldman Sachs managing director Chris Hussey wrote in a research note. Futures ticked up 0.3% in overnight trade, while Bitcoin (BTC-USD) climbed back above $40,000 after a bout of volatility last week.

There are some pockets of the market that have been outperforming in recent sessions, including travel stocks like airlines and cruise companies, as well as homebuilder shares that keep moving higher. The reopening theme has led to market resilience, while the meme trade has resurfaced, with names like GameStop (GME) and AMC (AMC) posting big gains. Inflation fears appear to be ebbing at the moment as a chorus of Fed officials continue to reassure investors that any price rises will be transitory.

Taper talk: "We're talking about talking about tapering, and that is what you want out of us. You want to be long-viewed here," San Francisco Fed President Mary Daly told CNBC. "Right now, policy is in a very good place. Policy is supporting the American people." Fed Vice Chair Richard Clarida also suggested yesterday that the appropriate timing of scaling back should be discussed at upcoming policy meetings and he may shed more light on the matter this morning. The Fed is currently scooping up $120B in assets per month, but Morgan Stanley thinks the central will start tapering its level of bond buying toward the end of 2021.

On the calendar: Wall Street bank chiefs are in for a grilling today in front of the Senate Banking and House Financial Services committees. Jamie Dimon and Co. are set to highlight their role in the pandemic recovery, but will be challenged over a drop in lending over the past year - especially to disadvantaged communities - as well as the racial diversity of their workforces (see below). Some tech earnings are also scheduled for after the bell, including Nvidia (NVDA), Snowflake (SNOW), Okta (OKTA) and Workday (WDAY).

Time for a grilling

Following bumper earnings on Wall Street in the first quarter, the heads of the six largest U.S. banks are set to testify before Congress today and tomorrow. The familiar faces: JPMorgan's (NYSE:JPM) Jamie Dimon, BofA's (NYSE:BAC) Brian Moynihan, Morgan Stanley's (NYSE:MS) James Gorman, Citigroup's (NYSE:C) Jane Fraser, Wells Fargo's (NYSE:WFC) Charles Scharf and Goldman Sachs' (NYSE:GS) David Solomon. Questions will target several hot-button social and economic issues, though the group is set to paint a favorable picture of an industry they say has allowed the economy to recover from COVID-19.

Zoom in: The biggest topic at the hearing will center around a decline in loan issuance over the past year to small businesses and consumers. Congressional reports may be cited showing lenders discriminated against some borrowers when distributing pandemic aid, though bankers feel the slowdown was largely attributable to a lack of demand. Expects some of the usual topics as well, including climate change, sustainable investing, diversity, racial justice, wealth inequality, cryptocurrencies and tax policies.

Democrats: "The pandemic exposed several frailties in the economy and financial system, including pervasive racial inequalities, unequal access to traditional banking products and services and unaddressed systemic risks threatening U.S. financial stability,” according to staff for Rep. Maxine Waters of California, who chairs the House Committee on Financial Services.

Republicans: "While the financial system has proven to be remarkably resilient, I worry that increasing political pressure could lead to distorting credit allocation, which would jeopardize our continued prosperity and undermine public policy making in America," said Pennsylvania Sen. Pat Toomey, the top GOP member on the Senate Banking Committee.

Ford investor event

Just a week after unveiling its F-150 Lightning to great fanfare, Ford (F) may have some other big announcements coming at today's investor day. Reuters suggests the company is developing two dedicated all-electric vehicle platforms - one for full-size trucks and larger SUVs, as well as another for cars and smaller SUVs. The dedicated systems could position Ford, whose shares are up 2% premarket, to compete better in the future with Tesla (TSLA), Volkswagen (OTCPK:VLKAF) and General Motors (GM).

Bigger picture: Ford's stock price has nearly doubled since CEO Jim Farley took the wheel on Oct. 1. That includes a 12.6% advance last week following the debut of the electric F-150 Lightning. One of the main targets investors also want to see is a long-promised 8% global adjusted profit margin target, including 10% in North America and 6% in Europe, which was promised by previous Ford CEOs, but never materialized.

Ford is projected to invest billions in the new EV platforms that could set it up for large-scale production of electric motors and components. Management is also likely to outline detailed plans for at least nine all-electric cars and SUVs, but will not electrify its entire range, instead choosing to focus on areas "where we are outstanding." Autonomous news? Ford already announced it would spend $7B on self-driving vehicles through 2025, includes investments in Argo AI, so expect some details.

Analyst commentary: "Since Jim Farley has taken over as CEO, Ford has promised increased transparency and measurable [key performance indicators] so we can track Ford’s progress and execution," RBC Capital Markets analyst Joseph Spak said in a research note. "We expect those, along with financial targets, to be detailed at the event." (75 comments)

Who sits on the board?

ExxonMobil (XOM) also holds its annual shareholder meeting today amid a proxy fight against a coalition of activist investors led by Engine No.1. The small hedge fund has proposed eight existing directors and four new green-tinged directors for the board, while ExxonMobil was pushing for its existing 12-director slate until two days ago. Its new plan calls for the appointment of two new directors, one with energy industry experience and one with climate experience, though Engine No.1 urged shareholders "not to let this last-minute tactic influence your vote."

Backdrop: Activists have accused Exxon of not doing enough in response to seismic shifts brought on by climate change. They're also hoping to promote a lower carbon strategy similar to the ones adopted by European oil majors like BP (BP), Royal Dutch Shell (RDS.A, RDS.B) and Total (TOT). The vote looks like it will come down to big fund owners BlackRock (BLK), Vanguard and State Street (STT) - which hold more than 20% of Exxon's stock combined - as well as the company's huge retail investor base, which accounts for nearly half of its outstanding shares.

Last week, proxy advisory firms Glass Lewis and ISS joined a growing list of pension funds and asset managers in supporting at least some of Engine No. 1's board nominees. In big news yesterday, Reuters reported that BlackRock voted for three of Engine No. 1's four candidates to join the company's board.

Analyst commentary: Exxon Mobil is still the "top major idea" among oil producers at Bank of America, which said the company is poised for a relative recovery after several years of lagging performance. The activist campaign "misunderstands the history, strategy, flexibility and outlook of the company," writes analyst Doug Leggate, as Exxon is "the only major to emerge with absolute growth, margin expansion and capacity for dividend growth intact from an organic portfolio," in contrast with some peers that failed on those fronts during the worst oil downturn in a generation. BofA rates shares at Buy, with a $90 price target. (97 comments)

What else is happening...

U.S. home prices surge by double-digit percentages.

ZipRecruiter (NYSE:ZIP) set to go public today via direct listing on NYSE.

WhatsApp (NASDAQ:FB) takes Indian government to court over new privacy rules.

Antitrust... D.C. attorney general sues Amazon (NASDAQ:AMZN) over price contracts.

In blow to U.S. miners, President Biden to look abroad for EV metals.

Tesla (NASDAQ:TSLA) ditching radar on some models, relying on cameras for Autopilot.

Elon Musk 'passionate believer' in decentralization - MicroStrategy.

Submission in June? Moderna (NASDAQ:MRNA) vaccine effective in children aged 12 to 17.

Speculation unraveling? Corn futures tumble 6% on larger supply.

Microsoft (NASDAQ:MSFT) teases the 'next generation of Windows' is coming soon.