Markets Today: Stock Indexes Lower on Chinese Covid Concerns

Morning Markets

December S&P 500 futures (ESZ22) this morning are down -0.36%, and December Nasdaq 100 E-Mini futures (NQZ22) are down -0.53%. 

Stocks are lower this morning on fears of new Chinese lockdowns after the first Chinese Covid death in almost six months was reported on Saturday and two more deaths were reported on Sunday. China reported 23,238 new Covid infections on Saturday, down slightly from Friday.

 

Stocks are also being undercut after Goldman strategists delivered a bearish stock view in a note Monday by saying, “The conditions that are typically consistent with an equity trough have not yet been reached.”  The strategists said that a peak in interest rates and recession-level valuations are necessary for a sustained stock-market recovery.  They said, “The near-term path for equity markets is likely to be volatile and down.”

Bitcoin (^BTCUSD) is down -0.51%, adding to Sunday’s drop of -2.44% and contributing to the risk-off atmosphere. 

In a supportive factor, the 10-year T-note yield this morning is down -1.5 bp at 3.814%.  The 10-year yield is trading at a comfortable half-percentage-point below the mid-October 15-year high of 4.34%.

Overseas stocks are mostly lower today, causing carry-over weakness for U.S. stocks.  The Euro Stoxx 50 index today is down -0.51%.  China’s Shanghai Composite closed down -0.39%, while Japan’s Nikkei Stock Index closed up +0.16%. 

Pre-Market U.S. Stock Movers

Disney (DIS) is up +8% in pre-market trading after the surprise news that Bob Iger will come back as CEO for a 2-year term while the board looks for a permanent replacement for former CEO Bob Chapek.  The Disney board is responding to disappointing earnings results and losses at the Disney+ streaming service.

Tesla (TSLA) is down -2.4% as investors worry about a large recall and about CEO Musk’s ongoing diversion at Twitter.

Crypto stocks are lower in pre-market trading, with bitcoin down -0.51% and with ongoing worries about any new fall-out from the recent FTX collapse.  Coinbase (COIN) -4.6%, Marathon Digital (MARA) -4.7%, and Riot Blockchain (RIOT) -3.1%.

Carvana (CVNA) is down -4.8% in pre-market trading after Argus Research downgraded the stock to sell on falling used car prices.

U.S.-listed Chinese stocks are trading lower in pre-market trading due to fears about the Covid spike in China:  Alibaba (BABA) -3.0%, JD.com (JD) -5.1%, Nio (NIO) -2.2%, and Xpeng (XPEV) -1.8%.

U.S.-listed Macau casino operators are trading lower this morning after island officials imposed a new Covid testing requirement on visitors from mainland China:  Wynn Resorts (WYNN) -3.6%, Las Vegas Sands (LVS) -2.1%, MGM Resorts (MGM) -1.3%, and Melco Resorts and Entertainment (MLCO) -5.5%.

Today’s U.S. Earnings Reports (11/18/2022)

Jacobs Solutions Inc (J), J M Smucker Co/The (SJM), Agilent Technologies Inc (A), Zoom Video Communications Inc (ZM), and Dell Technologies Inc (DELL).

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