Fresh off the biggest three-day rally for the Dow Jones Industrial Average since 1931, futures are pointing to a drop to close out the week, plus stocks to watch today in the Money & Markets Opening Bell.
The Top Story
Uncertainty is creeping back into the market as stock futures suggest a massive three-day rally is coming to an abrupt end.
On Thursday, the Dow and the S&P 500 both closed up 20% since Monday’s drop. The Dow ended the day up more than 1,300 points and the S&P 500 rallied more than 6%.
Why the change of heart: Stocks have been boosted by a $2 trillion coronavirus stimulus package and news the Federal Reserve will continue to pour money into the U.S. economy. However, the economic quarantine and the ultimate damage from it continue to rest in the back of investors’ minds.
What it all means: Quite simply, thoughts that stocks are coming out of a bear market are premature. There is still a lot of pressure on credit markets and, according to Refinitiv Lipper, investors dropped $259.8 billion into money market funds — the third week of record inflows.
What’s happening now: As of 9:20 a.m. EDT, Dow futures were down 3.2%, S&P 500 futures were off 3.1% and Nasdaq Composite futures fell 2.5%.
Stocks to Watch Today
Lululemon Athletica Inc. (Nasdaq: LULU) — The athletic apparel manufacturer said it isn’t providing guidance for the fiscal year due to the unknown impacts of the novel coronavirus pandemic. Shares of Lululemon Athletica were down 3.8%.
Tesla Inc. (Nasdaq: TSLA) — Shares of the electric automaker are down 3.6% after news it plans to slash on-site staff at its Storey County, Nevada, gigafactory by 75%, according to a post by county manager Austin Osborne.
Beyond Meat Inc. (Nasdaq: BYND) — Shares of the plant-based meat producer continue to reel from being downgraded to “sell” by Goldman Sachs Group Inc. (NYSE: GS). Beyond Meat was down 3.6% in premarket trading.
News You Can Use
In addition to a price war waged between Saudi Arabia and Russia, another problem facing oil is the fact demand is falling off a cliff.
Because nearly half of Americans are under a stay-at-home order due to the outbreak, demand for gasoline is expected to fall, leading oil demand to follow suit. IHS Markit estimates oil demand could fall by as much as 4.1 million barrels per day. That’s a 50% drop — the largest drop in history.
“The magnitude of gasoline demand decline will be much greater than the impact of the 2008 recession — and could be further protracted depending on how effective social distancing measures are at controlling the spread of the COVID-19 virus,” IHS Markit vice president Jim Burkhard said in the report.
Brent crude futures dropped 1.2% to $26.03 a barrel while West Texas Intermediate is up slightly to $22.66 a barrel.
Dollar Heads for Worst Week Since 2009
As stocks plunged two weeks ago, investors piled all they had into hoarding U.S. dollars. Now, that sentiment has changed.
According to Bloomberg, its Dollar Spot Index is on pace for its largest weekly loss since 2009, with the dollar falling against 16 other major currencies.
The index has dropped 3.5% this week, nearly halving gains made in the previous two weeks. It has fallen 5% against currencies including the Australian dollar, the British pound and the Mexican peso in the past five days.
US Moving Forward With Rule to Limit Chips to Huawei
Microchips produced by U.S.-designed chip-making tools would require an export license under a new rule proposed by the Trump administration.
That would allow the Commerce Department to block the sale of semiconductors manufactured by Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM) to Chinese telecom giant Huawei Technologies Co., according to The Wall Street Journal.
The government contends Huawei can be directed by the Chinese government to use its technology to spy on foreign governments. Huawei — which is contesting to build 5G network capabilities in many countries — has denied the claim.
What We’re Reading
Fed: US ‘May Well Be in Recession’ but Central Bank Won’t Run Out of Ammo (Money & Markets)
The Bill For Saving the World Economy is $7 Trillion and Rising (CNN Business)
Remember the 1 Product That Could Save Apple Shares? It’s Being Delayed (Money & Markets)
Earnings Report
Here are the companies releasing earnings reports today:
360 Finance Inc. ADR (Nasdaq: QFIN)
Autoweb Inc. (Nasdaq: AUTO)
Ocugen Inc. (Nasdaq: OCGN)
Secureworks Corp. (Nasdaq: SCWX)
Tela Bio Inc. (Nasdaq: TELA)
Check back each morning before the opening bell for stocks to watch today with Opening Bell, here on Money & Markets.