US equity index futures fell, while haven assets like gold and the Japanese yen gained, following a drone strike on two Saudi oil facilities, which knocked 5.7 million barrels out of production, raised geopolitical risks in the global energy market and sent crude prices surging.
The rally, which followed news that Saudi Arabia’s oil production is expected to remain below maximum capacity for weeks, saw Brent Crude, the global oil benchmark, advance as much as +19.50%, its largest spike since the 1991 Gulf War.
President Donald Trump has since said that the US is “locked and loaded depending on verification” that Iran staged the attack and authorized the release of oil, from the Strategic Petroleum Reserve to help offset cost increases.
The US holds an estimated 600 million barrels of emergency crude.
These developments come after Friday’s session, where US stocks ended mixed, as investors looked ahead to a highly-anticipated rate decision by the Federal Reserve - this Wednesday.
The S&P 500, which rose as much as +0.30% earlier in the session, closed -0.07% lower, with shares in Real Estate (-1.27%) and Consumer Staples (-0.57%) having offset gains in Material (+1.09%) and Financial (+0.78%) stocks.
However, despite the flat session, the benchmark index added +1.02% to its value on a week-to-week perspective.
Ahead, in today’s economic calendar, Monday includes; the Empire State Manufacturing Survey for September at 8:30am EST.
TODAY'S TOP HEADLINES
Energy & Oli: Crude Prices Soar After Attack on Saudi Facilities, Threatening Global Growth. (The WSJ)
Crude prices surged following an attack on Saudi Arabia’s oil infrastructure. In light of the disruption, President Trump said he has authorized the release of oil from the Strategic Petroleum Reserve.
China & Economy: China’s Economy Slows Again, Adding Pressure for Policy Action. (Bloomberg)
China’s slowdown is deepening just as risks for the global economy mount, piling pressure on the authorities to support growth.
ECONOMIC CALENDAR
Today's Economical Announcements.
08:30AM - ★★☆ - NY Empire State Manuf. (Sep) (Previous: 4.80)
STOCKS IN THE SPOTLIGHT
Pre-Market Movers & News Related Stocks.
Alder Pharmaceuticals (ALDR): [NEWS] Agreed to be bought by Denmark’s Lundbeck for nearly $2 billion. Alder is a US-based company specializing in migraine treatments.
Aimmune Therapeutics (AIMT): [NEWS] A Food and Drug Administration panel recommended approval of Aimmune’s treatment for peanut allergies in children. It would be the first-ever treatment on the market for that condition if the FDA follows the panel’s recommendation.
Aurora Cannabis (ACB): [DOWNGRADE] Downgraded to “sell” from “hold” at Stifel Nicolaus, citing the near-term outlook for the cannabis producer, as well as negative investor sentiment for the sector.
General Motors (GM): [NEWS] GM workers went on strike against the automaker in the first nationwide walkout since 2007, after the two sides failed to agree on a new contract.
Exxon Mobil (XOM), Chevron (CVX): [NEWS] Energy stocks are getting a boost following the jump in oil prices.
Square (SQ), PayPal (PYPL): [NEWS] Payment firms are likely to grab as much as $280 billion in revenue from banks by 2025, according to a new study on global payments from consulting firm Accenture.
Boeing (BA): [NEWS] The head of the UAE’s Civil Aviation Authority said he was not optimistic that Boeing could return its 737 Max to service by the end of this year.
Lowe’s (LOW): [UPGRADE] Wedbush upgraded the home improvement retailer to “outperform” from “neutral,” pointing to signs of improving execution.
Apple (AAPL): [NEWS] Walt Disney CEO Bob Iger has resigned from Apple’s board of directors. His departure comes as Disney and Apple prepare to launch competing video services, Disney+ and Apple TV+.
Lyft (LYFT), Uber (UBER): [UPGRADES] Were both upgraded to “buy” from “hold” at HSBC. However, the price targets for both were cut to $62 from $67 for Lyft, and to $44 from $49 for Uber. The firm said regulatory concerns surrounding both companies are already priced in.
Blackstone (BX): [NEWS] Bought Canadian office and industrial property manager Dream Global Real Estate Investment Trust for about $4.7 billion.
Dick’s Sporting Goods (DKS): [DOWNGRADE] Downgraded to “market perform” from “outperform” at Wells Fargo Securities in a valuation call, with the stock having hit its price target after a 25% year-to-date gain.
MOMENTUM STOCKS
GAINERS: NGL, IGT, GEL, RMBS, YELP
DECLINERS: MO, CBOE
TODAY'S IPOs
None.
