Here are five things you must know for Tuesday, May 10:
1. -- Stock Futures Bounce As Investors Buy Dip After Lowest S&P 500 Close In A Year
U.S. equity futures bounced higher Tuesday, potentially lifting the S&P 500 from its lowest closing level since March of last year, as investors look to tame a three day sell-off on Wall Street that wiped away trillions in value from global stock portfolios.
With growth concerns intensifying amid China's ongoing Covid crisis, and bets on a series of Federal Reserve rate hikes holding firm in the face of the fastest inflation in forty years, markets are caught in a vice of stagflation worries that is being compounded by a surge in market volatility, which has taken the the CBOE's VIX index, also known as Wall Street's 'fear gauge', to the highest levels since early March.
Those factors helped induce last night's selling on Wall Street, which pushed the S&P 500 below the 4,000 point mark for the first time since March of 2021 as the benchmark's year-to-date decline extended to around 16.5%.
Mega-cap tech stocks such as Apple (AAPL), Microsoft (MSFT) and Tesla (TSLA) weighed on both the S&P 500 and the Nasdaq, which is now down more than 27% from the all-time peak the benchmark reached in mid-November.
Tuesday's session, however, could see dip buyers setting a floor for markets all over the world, with global stocks rebounding from a two-year low in the overnight session and Europe's Stoxx 600 rising just over 1% in early Frankfurt trading.
However, with the VIX still trading firmly above the 30-point mark -- and last seen 9.8% higher at 33.15 points -- and a host of Fed speakers out in the field during today's trading session, including Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic and New York Fed President John Williams, the early pre-market gains may struggle to hold throughout the trading session.
Save-haven trading, which lifted the U.S. dollar index to s fresh 20-year high on Monday, eased in overnight dealing, although investors continued to favor U.S. Treasury bonds, taking the yield on benchmark 10-year notes to just over 3%, a near 20 basis point rally from early Monday levels.
Still, for the moment at least, futures contacts tied to the Dow Jones Industrial Average indicating a 215 point opening bell gain while those linked the S&P 500, which is down 13.5% for the year, are priced for a 32 point move to the upside. Futures linked to the tech-focused Nasdaq are looking at a 160 point opening bell gain.
2. -- Tesla Sees China Sales, Export Slump as Shanghai Factory Hit By Covid Lockdowns
Tesla shares pared gains in pre-market trading after data from China showed a sharp slowdown in sales and exports from its Shanghai gigafactory and reports suggested the country's Covid crisis has shuttered production once again.
The China Passenger Car Association said Tesla produced just 10,757 cars last month, selling just over 1,500 and exporting none, thanks to a 22-day closure of its Shanghai facility, which makes the Model 3 sedan and Model Y crossover, during the city's Covid lockdown. The April tally is the lowest in 2 years and compares to a sale total of 65,814 in the month of March.
Reuters, meanwhile, has reported that a lack of parts will keep the plant closed for at least a day, reducing output from the typical pace of 1,200 to around 200 vehicles.
Tesla shares were marked 2.8% higher in pre-market trading to indicate an opening bell price of $809.33 each.
3. -- Twitter Shares Extend Slide As Short Seller Cautions on Musk Re-Pricing Takeover
Twitter (TWTR) shares extended declines in pre-market trading after analysts at Hindenburg Research, a noted short-seller, cautioned that Elon Musk's takeover bid could be 'repriced' if the Tesla CEO threatens to walk away from the $44 billion deal.
Hindenburg said Musk, by most measures the world's richest man, could pay the $1 billion break-up fee tied to the takeover and still come away with a better deal if he were to re-negotiate, noting his "significant leverage" over the micro-blogging website and the lack of a competing offer.
"Musk holds all the cards here," Hindenburg said. "If Elon Musk's bid for Twitter disappeared tomorrow, Twitter's equity would fall by 50% from current levels. Consequently, we see a significant risk that the deal gets repriced lower."
Twitter shares were marked 0.6% lower in pre-market trading to indicate an opening bell price of $47.69 each, a level that takes shares in the group back to levels seen just prior to Musk's 'best and final' offer in early April.
4. -- Bitcoin Prices Find Support After Dipping Below $30,000
Bitcoin prices rebounded modestly Tuesday, after briefly falling below the $30,000 mark in overnight trading, as the world's biggest cryptocurrency looks to reverse five consecutive days of losses and an exodus of investor cash.
Bitcoin, which is down more than 53% from its late November highs, traded as low as $29.940.50 each in European dealing, extending its May decline to around 20%. The moves have also put nearly half of its investors -- around 40% -- under water, according to data from research group Glassnode.
"Whilst this represents a significant drawdown, it remains modest when compared to the ultimate lows of prior Bitcoin bear markets. July 2021 reached a drawdown of -54.2%, and the bear markets of 2015, 2018 and March 2020 capitulated at lows between -77.2% and -85.5% off the ATH," Glassnode said.
Bitcoin was last seen 2.55% higher on the Tuesday session at $31,462.30 each
5. -- AMC Shares Leap As 'The Batman' Drives Ticket Sales Rebound
AMC Entertainment (AMC) shares jumped higher in pre-market trading after the movie theatre chain posted a huge increase in first quarter ticket sales thanks in part to success of films such as The Batman" and "Spider-Man: No Way Home".
AMC said revenues for the three months ending in March were pegged at $785.7 million, a more than four-fold increase from last year and well ahead of the Street consensus forecast of $743 million. The group also posted a narrower-than-expected first quarter loss of 52 cents per share,
"AMC just put a very big weekend on the books, and we're highly optimistic that it's a harbinger of things to come. And if you want to know what's to come, Top Gun: Maverick, Memorial Day weekend, then Jurassic World Dominion and then more and more and more and more," CEO Adam Aron told investors on a conference call late Monday.
AMC shares were marked 4.95% higher in pre-market trading to indicate an opening bell price of $13.14 each, a move that would still leave the stock with a year-to-date decline of around 51.7%
