New York pre-market equity index futures were marginally negative this morning, alongside global stocks, after last week’s broader market selling was extended, amid concerns over a slowing global economy, paired with the first inversion of the US Treasury yields in more than a decade.
Yields on 3-month US Treasury bills continued to trade higher than those on 10-year notes in overnight trading, keeping the yield curve in a so-called ‘inverted position’, a condition that has historically signaled US recessions in the past 60 years, according to US central bank studies.
The inversion is largely speculated to have been triggered by reactions to last week’s US manufacturing activity data, from March, which eased to its lowest level in nearly two years, while similar poor readings were released from Germany, Europe’s largest economy.
These moves in pre-market came after Friday’s session where Global equity markets initially reacted to weak economic data and troublesome bond yields, leading to widespread declines in US Financial (-2.76%) and Materials (-2.98%) sectors, which weighed the S&P 500 -1.92% lower, clinching a -0.73% drop for the week.
All three major stock indices notched their worst performances since January 3, with the Dow Jones Industrial Average losing -1.78% on Friday, down -1.31% for the week, and the tech-heavy Nasdaq Composite sinking -2.20%, yet positive +0.12% for the week.
In today’s economic calendar; Chicago Fed National Activity Index for February is scheduled for release at 8:30am EST, followed by Dallas Fed Manufacturing Survey data for March at 10:30am EST.
In corporate news; Winnebago Industries (WGO) and Red Hat (RHT) are amongst the major companies scheduled to release their latest financial data today.
TODAY’S TOP HEADLINES:
Politics: Mueller Doesn’t Find Trump Campaign Conspired With Russia. (The WSJ)
Special counsel Robert Mueller concluded that President Trump and his campaign didn’t conspire or coordinate with Russia to interfere in the 2016 election, according to a letter Attorney General William Barr sent to Congress on Sunday that summarized the final report on Mr. Mueller’s investigation.
Brexit: Theresa May Faces Growing Dissatisfaction Over Brexit. (The WSJ)
Prime Minister Theresa May is facing fresh questions about whether she can stay in office long enough to see Brexit through, as lawmakers enter another critical week of decisions over the UK’s departure from the European Union.
Today’s Economical Announcements
08:30AM – ★☆☆ – Chicago Fed Activity (Feb) (Previous: -0.43)
10:30AM – ★☆☆ – Dallas Fed Mfg Business (Mar) (Previous: 13.1)
STOCKS IN THE SPOTLIGHT:
Pre-Market Movers & News Related Stocks
Avaya (AVYA): [NEWS] Avaya is considering a buyout offer from a private-equity firm, whose identity could not be learned. The offer values the telecom equipment and software maker at more than $5 billion or more than $20 per share.
Viacom (VIAB): [NEWS] Viacom and AT&T (T) reached a new agreement to keep Viacom channels on AT&T platforms like DirecTV and U-Verse. The two sides had agreed to continue contract negotiations past a Friday night deadline.
Nu Skin Enterprises (NUS): [DOWNGRADE] Downgraded to “sell” from “hold” at Stifel Nicolaus, which expressed concerns about regulatory risk in the China market for the health products maker.
Winnebago (WGO): [EARNINGS] Earned an adjusted 60 cents per share for its fiscal second quarter, 2 cents a share above estimates. Revenue short of forecasts, however, and Winnebago said market conditions have been challenging over the past six months. The company said it is optimistic that conditions are improving.
Tesla (TSLA): [NEWS & DOWNGRADE] Registration data suggests that Tesla sales may have slumped, according to The New York Times. Separately, RBC Capital lowered its price target on the stock to $210 from $245 while maintaining an “underperform” rating, citing sagging demand.
Fiat Chrysler (FCAU): [NEWS] Fiat Chrysler rebuffed a merger approach from Peugeot parent PSA Group earlier this year, according to The Wall Street Journal. The FT reports, however, that the company’s chairman, John Elkann, is making a renewed push to team up with another automaker.
Biogen (BIIB): [NEWS] The drugmaker announced a new $5 billion share repurchase program, in addition to the $1.7 billion remaining under a prior authorization. That follows the stock’s plunge last week, following the decision to end a late stage study of an Alzheimer’s treatment that did not produce the desired results.
Boeing (BA): [NEWS] Boeing hosted teams from three US airlines over the weekend to review a software upgrade for the grounded 737 MAX fleet, and is planning a Wednesday information session for pilots, technical leaders, and regulators as it moves to return the jet to service after two fatal crashes over the past few months.
Thermo Fisher Scientific (TMO): [NEWS] Thermo Fisher is buying privately held Brammer Bio for $1.7 billion to expand the lab equipment maker’s presence in the gene therapy field.
Eli Lilly (LLY): [NEWS] Lilly said the price it has been paid for its popular Humalog insulin dropped to an average of $135 per month per patient in 2018, down from $147 in 2014. The information was released amid increased scrutiny for Lilly and other pharmaceutical companies over prescription drug prices.
Apple (AAPL): [NEWS] Apple is set to unveil new video and news services today at an event at its California headquarters.
Allergan (AGN): [NEWS] Allergan said it would split its chairman and chief executive roles, but not until its next leadership change. Activist investor Appaloosa has been pushing for an immediate split of the two roles.
GAINERS: PZZA, FNF, TIF, VZ, CAG, SJM, DRI
LOSERS: ZUO, DXCM, TRN, BIIB, MNST, FITB, KEY, RF, SNV, HBAN