U.S. stock index futures fell on Tuesday as soaring oil prices and hawkish comments from a Federal Reserve official spooked investors, with focus turning to talks between U.S. President Joe Biden and Fed Chair Jerome Powell later in the day.
Market Snapshot
At 08:15 a.m. ET, Dow e-minis were down 180 points, or 0.54%, S&P 500 e-minis were down 21.75 points, or 0.52%, and Nasdaq 100 e-minis were down 14.5 points, or 0.11%.
Pre-Market Movers
Yamana – The Canadian gold producer agreed to be acquired byGold Fields(GFI) in an all-stock deal valued at $6.7 billion. Yamana Gold shareholders will receive 0.6 Gold Field shares for each share they now hold. Yamana surged 14.9% in the premarket while Gold Fields tumbled 11.8%.
Credit Suisse – Credit Suisse denied a Reuters report that it is mulling various options to raise capital after a series of losses. Two people with knowledge of the matter told Reuters the bank was in the early stages of weighing options, such as a share sale or selling a business unit. Credit Suisse lost 3.8% in premarket action.
Unilever– Unilever jumped 6.4% in premarket trading after the consumer products company named activist investor Nelson Peltz to its board. Peltz’s Trian Fund Management holds a roughly 1.5% stake in Unilever.
Sanofi– The drug maker’s shares slipped 3.7% in the premarket after the FDA put a trial related to its erectile dysfunction drug Cialis on hold. The trial was to evaluate the conversion of the prescription treatment to “over the counter” status, with Sanofi saying the halt was related to how the trial had been designed.
Nio – Nio shares jumped 5.1% in the premarket after Morgan Stanley added the China-based electric vehicle maker’s stock to its “tactical idea” list. Morgan Stanley thinks the shares are set to rise as Covid restrictions are eased in the Shanghai region, and as the company benefits from new subsidies for electric car buyers.
Zoom – The videoconferencing company’s stock received a double upgrade at Daiwa Securities, which raised its rating to “outperform” from “underperform”. Daiwa said the recent tech pullback presents upside opportunity, and that growth expectations for Zoom now seem more realistic. Zoom added 1.6% in premarket trading.
American Eagle Outfitters – The apparel retailer’s stock slid another 5.7% in the premarket after a post-earnings tumble of 6.6% Friday. The stock was downgraded to “underweight” from “equal-weight” at Morgan Stanley, which feels reduced guidance from American Eagle management may still be too optimistic.
Sherwin-Williams – The paint company’s shares slipped 2.3% in premarket trading after Credit Suisse initiated coverage with an “underperform” rating. The firm said rising interest rates could impact residential and commercial paint demand.
Market News
KE Holdings Reports Net Revenues of RMB12.5 Billion
KE Holdings Inc. reported quarterly sales of $2.00 billion which beat the analyst consensus estimate of $1.82 billion by 9.89 percent. This is a 36.69 percent decrease over sales of $3.16 billion the same period last year.
Morgan Stanley Says US Stock Rally Has Limited Upside
The relief rally in US equities has limited scope to go much further as risks to growth remain prevalent, according to Morgan Stanley’s Michael Wilson.
“Last week’s strength will prove to be another bear market rally in the end,” the strategist wrote in a note. “The key fundamental call we are focused on now is slowing growth, and our view that earnings estimates are too high.”
GSK to Buy U.S. Biotech Affinivax in $3.3 Billion Deal
GSK said Tuesday it will buy Boston-based clinical-stage biotech company Affinivax in a deal worth up to $3.3 billion as it looks to bolster its vaccine pipeline ahead of the planned separation of its consumer healthcare business.
Qualcomm Eager to Invest in Arm Alongside Rivals in Upcoming IPO
The US chipmaker Qualcomm wants to buy a stake in Arm alongside its rivals and create a consortium that would maintain the UK chip designer’s neutrality in the highly competitive semiconductor market.