U.S. stock index futures fell on Monday, bracing for the start of the earnings season which could see profits come under pressure at a time of growing fears of an economic downturn due to aggressive interest rate hikes.
Market Snapshot
At 7:50 a.m. ET, Dow e-minis were down 142 points, or 0.45%, S&P 500 e-minis were down 22.5 points, or 0.58%, and Nasdaq 100 e-minis were down 90 points, or 0.74%.
Pre-Market Movers
Twitter – Twitter slid nearly 5% in premarket trading after Elon Musk announced late Friday that he was abandoning his $44 billion takeover deal. Twitter responded by saying it plans legal action to hold Musk to the agreed-upon transaction. However, Trump stocks took off, with DWAC surging over 14%.
Wynn, Las Vegas Sands – Wynn Resorts dropped 6% and Las Vegas Sands fell 5.4% in the premarket, as the gambling enclave of Macau begins a one-week shutdown to try to contain the spread of Covid-19.
Lululemon Athletica,Under Armour Class A – Lululemon fell 3.9% in the premarket while Under Armour lost 3% after Jefferies downgraded both apparel makers. Lululemon was cut to “underperform” from “hold,” with Jefferies noting increased competition and an easing of the COVID-related spike in demand. Under Armour was downgraded to “hold” from “buy” on concerns about management volatility and lagging fundamentals.
Uber – Uber is said to have lobbied extensively to relax labor and tax laws, and used so-called “stealth technology” to block government scrutiny and gain public trust, according to a report by the International Consortium of Investigative Journalists. Uber issued a statement saying it had made mistakes in the past and that it is a different company today. Uber lost 2.6% in premarket action.
China tech stocks – These stocks fell after the Chinese government fined Alibaba(BABA), Tencent and other China tech companies for failing to comply with anti-monopoly rules and not disclosing transactions. Alibaba lost 3.9% in the premarket, with JD.com(JD) off 3.4%,Pinduoduo(PDD) slipping 4.4% and Baidu(BIDU) down 3%.
Mattel – Mattel was upgraded to “buy” from “neutral” at Goldman Sachs, which thinks the toy maker will benefit from demand related to new TV and film releases. Mattel rallied 2.9% in premarket trading.
NIO Inc. – The China-based electric car maker said its board had formed an independent committee to investigate allegations made by short-selling firm Grizzly Research. Grizzly had accused Nio of exaggerating its revenue and profit margins, allegations that Nio said were without merit. Nio lost 3.2% in the premarket.
Qorvo – The provider of radio frequency technology was downgraded to “market perform” from “outperform” at Cowen, which thinks weakness in the Android market will weigh on revenue and profit margins. Qorvo lost 2.9% in premarket action.
Market News
Twitter has hired merger law heavyweight Wachtell, Lipton, Rosen & Katz as it races to sue Elon Musk for moving to dump his $44 billion takeover of the company, and it aims to file suit early this week.
Uber attempted to lobby politicians and flouted laws as part of efforts to expand globally from 2013 to 2017. The company allegedly received assistance in its efforts from politicians including French President Emmanuel Macron.
GLOBALFOUNDRIES Inc. and STMicroelectronics NV will announce on Monday plans to build a semiconductor factory in France for an investment of nearly 4 billion euros, as part of Europe's efforts to boost its independence in microchips. This would help support a push from the European Commission to produce 20% of the world's microchips in Europe by 2030.
The Financial Stability Board (FSB) , treasury officials and central bankers from the Group of 20 economies (G20), said on Monday it would propose "robust" global rules for cryptocurrencies in October, following recent turmoil in markets that has highlighted the need to regulate the "speculative" sector.
Ford issued a safety recall of a total of 100,689 of its 2020-2022 Corsair, Escape and Maverick vehicles with 2.5 liter HEV/PHEV engines because of an under hood fire hazard, according to a statement it sent to UPI.
The U.S. government has completed 10 airline investigations into delayed or withheld passenger refunds during the COVID-19 pandemic and will take enforcement action in coming weeks, a Transportation Department official said on Sunday.
Toyota said on Monday it is extending the suspension of line 1 at its Motomachi plant, as it continues to investigate the cause of the recall for a certain model. The volume affected by the adjustment will be about 4,000 units, and the global production plan for July will remain unchanged from the recently announced volume of approximately 800,000 units.
Chinese banks extended 2.81 trillion yuan ($419.3 billion) in new yuan loans in June, up from May; Broad M2 money supply grew 11.4% from a year earlier, central bank data showed on Monday; Outstanding yuan loans were up 11.2% from a year earlier at the end of June compared with 11.0% growth the previous month.
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