U.S. stock index futures slipped into red on Friday as lingering concerns over the banking sector's health steered investors away from financial stocks despite reassurances from authorities.
Market Snapshot
At 7:51 a.m. ET, Dow e-minis were down 340 points, or 1.05%, S&P 500 e-minis were down 34.50 points, or 0.87%, and Nasdaq 100 e-minis were down 64.75 points, or 0.50%.
Pre-Market Movers
Deutsche Bank (DB) - Deutsche Bank fell 11% in U.S. premarket trading after the German lender’s shares took a hit following recent troubles at fellow European banking giant Credit Suisse (CS). Reuters reported that the price of Deutsche Bank‘s credit default swaps rose to a four-year high on Thursday.
Shares of major U.S. banks JPMorgan Chase & Co (JPM), Morgan Stanley (MS), Wells Fargo (WFC), Bank of America (BAC) and Citigroup (C) dropped more than 2% in premarket trade.
Shares of U.S. regional lenders First Republic Bank (FRC), PacWest Bancorp(PACW), Western Alliance Bancorp (WAL) and Truist Financial Corp (TFC) fell between 2.2% and 3.5%.
European banks also came under pressure, with areport of a U.S. probeon Credit Suisse (CS) and UBS (UBS) further souring the mood. Their U.S.-listed shares were down about 6% each. While Barclays (BCS) and HSBC Holdings (HSBC) fell 4%.
Block (SQ) - Block was down 2.1% in premarket trading. Shares of the payments company closed almost 15% lower on Thursday after being targeted by short-selling firm Hindenburg Research. The firm alleged that Block has inflated user metrics and hasn’t reined in improper activity on its platform. Block called the report “factually inaccurate” and “misleading,” and announced plans to explore legal action against Hindenburg.
Coinbase Global (COIN) - Coinbase fell 3.3% after slumping 14% on Thursday following receipt of a “Wells Notice” from the Securities and Exchange Commission, which warned the agency could take enforcement action against the crypto exchange. The stock was downgraded Friday to Underperform from Market Perform with a $36 price target by analysts at TD Cowen, the Fly reported.
Ouster (OUST) - Lidar maker Ouster reported fourth-quarter sales that missed estimates and the stock fell 8.2% in premarket trading. The company expects fiscal first-quarter sales to range between $15 million to $17 million, lower than Wall Street estimates of $20 million. But Ouster just closed its merger with Velodyne on Feb. 1, and said it remains on track to top previously projected annualized cost savings of $75 million within nine months.
Netflix (NFLX) - Netflix led the S&P 500 on Thursday, closing with a gain of 9%. In premarket trading, shares of the streaming company were down 0.8%.
Virgin Orbit (VORB) - Billionaire Richard Branson's cash-strapped satellite launch company Virgin Orbit Holdings said on Thursday it is in talks with "interested parties" about an investment in the company. Virgin Orbit shares fell 2% in premarket trading.
Market News
Tesla Recalls 2,649 More Imported Model S in China Due to Risk of Frunk Lid Opening While Driving
Tesla is recalling a total of 2,649 imported Model S vehicles with production dates between October 14, 2015, and August 23, 2020, effective immediately, according to an announcement on China's State Administration for Market Regulation (SAMR) website today.
The recall is an expansion of the one issued on December 31, 2021, the announcement said.
Vehicles subject to this recall may have a slightly backward alignment of the front trunk latch to the buckle, which does not affect the locking of the primary latch, but may affect the locking of the secondary latch.
Deutsche Bank Shares Tumble, Default Insurance Cost Shoots up
Deutsche Bank shares fell for a third day in premarket trading Friday, after a sharp jump in the cost of insuring against the risk of default late the day before fuelled concerns about the overall stability of Europe's banks.
They closed 6.1% lower on Thursday, while the bank's credit default swaps (CDS)<DB5YEUAM=MG> - a form of insurance for bondholders - shot up to 173 basis points (bps) from 142 bps the day before, according to data from S&P Market Intelligence on Thursday.
This marks the largest one-day rise in Deutsche's CDS on record, according to Refinitiv data.
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