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Stock futures flat after S&P 500 hits new high, despite rising inflation

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Traders at the New York Stock Exchange, June 2, 2021.

Source: NYSE

U.S. stock futures were flat Thursday night after the S&P 500 hit a new high during regular trading, despite hotter-than-expected inflation data.

Futures tied to the Dow Jones Industrial Average and the S&P 500 were close to flat at the start of the overnight session. Nasdaq futures rose 0.1%.

During the regular session, the Dow Jones Industrial Average rose 19 points, or 0.06% to 34,466.24. The S&P 500 ended the day up 0.47% at 4,239.18. The Nasdaq Composite ended the day up 0.78% at 14,020.33.

The Labor Department reported consumer price index data on Thursday, showing inflation is rising at its fastest pace since 2008 as the economy rebounds from the pandemic-related recession.

The CPI represents a basket including food, energy, groceries and prices across a spectrum of goods, and jumped 5% in May from a year earlier.

Markets shrugged off the news, however.

“A significant degree of this inflation may prove transitory as nearly half of the above-average spike in inflation comes from the base effects of last year’s weakened economy and even supply shortages should prove transitory as companies increase productivity and begin to meet pent-up demand,” Jason Pride, CIO of private wealth at Glenmede.

Separately, initial jobless claims for the week ended June 5 came in at 376,000 — the lowest tally of the Covid pandemic — according to a separate Labor Department report released Thursday.

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Zoom and Salesforce make $23 million after IPO of Israel’s Monday.com

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Monday.com celebrates its IPO at the Nasdaq, June 10, 2021.

Source: Nasdaq

In Zoom’s IPO two years ago, Salesforce made a bundle by investing $100 million at the offer price and watching the stock soar out of the gate. Zoom learned a little something from that experience.

Zoom and Salesforce each purchased $75 million worth of stock in Israeli software company Monday.com, which debuted on the Nasdaq on Thursday. Monday.com, which provides cloud-based collaboration tools, didn’t have a Zoom-level pop, but the stock did jump 15% — rising from $155 to $178.87 — giving both investors a quick paper profit.

By the close of trading, Zoom and Salesforce’s stake had blossomed to $86.55 million, giving each a one-day gain of $11.55 million. Like Monday.com’s insiders, Zoom and Salesforce are subject to lock-up restrictions and can’t sell for 180 days.

For Salesforce, purchasing IPO shares has become another way for its venture arm to generate returns beyond traditional investments in start-ups and later-stage tech companies. In addition to investing in the offerings from Zoom and Monday.com, Salesforce put $250 million last year into Snowflake’s IPO, a stake that more than doubled in valued to $529 million on the database company’s first day of trading.

In 2020, Salesforce reported a $2.17 billion annual gain from its investments, primarily from Snowflake and software vendor nCino, a company that Salesforce backed long before its IPO last year. In prior years, Salesforce Ventures invested in the IPOs of Dropbox and SurveyMonkey.

At Zoom, investments are a new business. In April, the video-chat company launched a $100 million fund to back start-ups that would be building features and functions on top of Zoom. However, those deals will be much smaller, given that Zoom’s investment in Monday.com is equal to 75% of that whole fund. According to PitchBook, this is Zoom’s first known investment of any size.

While a 15% one-day jump is certainly attractive, it’s significantly below the kinds of pops the market has seen in recent years and that Salesforce has enjoyed. IPO pricing overall has tightened this year after massive first-day gains in 2020 in Snowflake, DoorDash and Airbnb led to increased criticism that companies are leaving too much money on the table to hand over cheap stock to new investors.

WATCH: Bill Gurley on the IPO market

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Third member of prestigious FDA panel resigns over approval of Biogen’s Alzheimer’s drug

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A sign for the Food and Drug Administration is seen outside of the headquarters on July 20, 2020 in White Oak, Maryland.

Sarah Silbiger | Getty Images

A third member of a key Food and Drug Administration advisory panel has resigned over the agency’s controversial decision to approve Biogen‘s new Alzheimer’s drug, Aduhelm, CNBC has learned.

Dr. Aaron Kesselheim, a professor of medicine at Harvard Medical School, said the agency’s decision on Biogen “was probably the worst drug approval decision in recent U.S. history,” according to his resignation letter obtained by CNBC.

“At the last minute, the agency switched its review to the Accelerated Approval pathway based on the debatable premise that the drug’s effect on brain amyloid was likely to help patients with Alzheimer’s disease,” he wrote in resigning from the FDA’s Peripheral and Central Nervous System Advisory Committee.

He wrote it was “clear” to him that the agency is not “presently capable of adequately integrating the Committee’s scientific recommendations into its approval decisions.”

“This will undermine the care of these patients, public trust in the FDA, the pursuit of useful therapeutic innovation, and the affordability of the health care system,” he said.

Shares of Biogen surged 38% Monday after the FDA approved the biotech company’s drug, the first medication cleared by U.S. regulators to slow cognitive decline in people living with Alzheimer’s and the first new medicine for the disease in nearly two decades.

Biogen’s drug targets a “sticky” compound in the brain known as beta-amyloid, which scientists expect plays a role in the devastating disease. 

The FDA approved the drug under a program called accelerated approval, which is usually used for cancer medications, expecting the drug would slow the cognitive decline in Alzheimer’s patients. The agency granted approval on the condition that Biogen conducts another clinical trial.

The agency’s decision was a departure from the advice of its independent panel of outside experts, who unexpectedly declined to endorse the drug last fall, citing unconvincing data. At the time, the panel also criticized agency staff for what it called an overly positive review of the data.

At least two other FDA panel members have resigned as a result of the agency’s decision on the drug. Mayo Clinic neurologist Dr. David Knopman and Washington University neurologist Dr. Joel Perlmutter have also submitted resignation letters.

“I was very disappointed at how the advisory committee input was treated by the FDA,” Dr. Knopman told Reuters. “I don’t wish to be put in a position like this again.”

–Reuters contributed to this report.

This is a developing story. Please check back for updates.

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Apple hires BMW veteran in latest sign of electric car push

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This photo, taken in March 2019, shows Apple’s headquarters in Cupertino, California.

felixmizioznikov | iStock Editorial | Getty Images

Apple has hired Ulrich Kranz, a former senior executive at BMW who focused on electric cars, Apple confirmed to CNBC’s Phil LeBeau on Thursday.

The hire is the latest sign that Apple is serious about building an electric car to compete with automakers such as Tesla.

Hyundai said earlier this year it was in talks with Apple to manufacture its car before walking its comments back and confirming it was no longer in discussions.

Apple has never confirmed it is building a car but has hired talent from the automotive industry and tested self-driving software in California. In 2018, Apple hired Doug Field from Tesla, who worked on Tesla’s Model 3. With its expertise in supply chains, battery technology, and user experience, Apple would represent a major competitor to existing automakers if it ever releases a car. Apple’s car project has been restructured several times, most recently in early 2019.

Apple did not say whether Kranz will work on Apple’s car project, which is called Special Projects Group or SPG. But Kranz has extensive experience building teams focused on electric cars.

Before joining Apple, Kranz was a co-founder of Canoo, which is working on a self-driving electric car. At BMW, he led the company’s electric car development program, which resulted in the electric i3 vehicle and a hybrid sports car called the i8, according to Bloomberg, which first reported the hire.

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