Five things you need to know before the market opens on Friday November 11:
1. -- Stock Futures Extend Gains On Rate Bets, China Covid Easing
U.S. equity futures moved higher again Friday, following on from the biggest single-day gains in more than two years, as loosening Coivd restrictions in China added to market confidence that inflation may have peaked in the world's largest economy.
A 1,200 point rally for the Dow capped the best day on Wall Street since before the pandemic, as traders reacted to cooler-than-expected inflation data for the month of October that triggered a big change in forecasts for near-term Federal Reserve rate hikes.
October CPI was pegged at 7.7%, firmly south of Street forecasts at the slowest annual gain since January. The reading, which included downward moves in a host of the reading's sub-components, has not only given rise to hopes of peak inflation, but has also cemented bets on a small Fed rate hike next month in Washington - which comes, coincidently, a day after the scheduled reading of November CPI data.
CME Group futures now suggest an 85.4% chance of a 50 basis point move, snapping a four-meeting run of 75 basis point hikes, with bets of a terminal Fed Funds rate in the region of 4.47% to 5% in the spring now dominating futures trading.
The U.S. dollar index, which tracks the greenback against a basket of six global currency peers, suffered its biggest one-day decline in more than a decade, falling more than 2%, and extended its downward move in overnight trading to change hands at 1407.443.
Benchmark 10-year Treasury note yields were also on the move, falling another 5 basis point to 3.811%, adding to a more than 30 basis point move for the paper since a $35 billion auction earlier this week. Bond market will be closed Friday, however, for its scheduled Veterans' Day observance.
On Wall Street, futures tied to the S&P 500 are priced for a 21 point opening bell gain following last night's 5.5% gain, while those linked to the Dow Jones Industrial Average are set to add another 155 points to yesterday's rally. The tech focused Nasdaq is priced for a 93 point opening bell gain after Thursday's 7.35% surge.
Overnight news from China that officials in Beijing will loosen at least some of their Covid restrictions, including a shorter period for quarantine and scraping fines for airlines that ferry too many infected passengers, added to the U.S. rate optimism and triggered massive gains for stocks in the Asia region.
The MSCI ex-Japan index was marked 5.58% higher heading into the close of trading, while the Hang Seng index in Hong Kong gained 7.74%.
In Europe, London FTSE fell 0.27% as the pound jumped to 1.1756 against the beaten-down greenback and data showed the U.K. economy slipped into what could be a prolonged recession over the three months ending in September.
The region-wide Stoxx 600, meanwhile, was marked 0.4% higher in early Frankfurt trading.
2. -- FTX Woes Deepen As Crypto Exchange Warns On US Operations
FTX, the teetering crypto exchange fronted by Sam Bankman-Fried, could be forced to close its U.S. operations in the coming days amid mounting pressures on its finances and the possible bankruptcy of its global business.
Internal memos show the FTX's legal counsel Ryne Miller has warned employees that, while the group is working with advisers to form a plan to address the reported $9.4 billion hole in its finances, 'we should not be optimistic for an outcome that is positive." The group has also warned that trading could be halted "in the coming days".
The spillover in broader crypto markets continues, as well, with troubled digital lender BlockFi suspending operations and Bankman-Fried saying he will close the Alameda Research division that he owns. The Securities and Exchange Commission of the Bahamas has also frozen the assets of FTX subsidiary FTX digital.
Bitcoin prices, meanwhile, resumed their recent slide, falling 1.5% in overnight trading to around $17,400 each. On this day last year, the world's biggest cryptocurrency was trading at around $64,400 each.
3. -- Musk Says Can't Rule Out Twitter Bankruptcy As More Execs Depart
Twitter CEO Elon Musk warned late Thursday that his new $44 billion acquisition is bleeding cash at a rate that could trigger a near-term bankruptcy for the privately-held social media platform.
Media reports of Musk's first 'all-hands' phone call with Twitter employees have said Musk raised the specter of bankruptcy just hours after warning in an email that it may not be able to survive "the upcoming economic downturn" if it can find a way to lift subscription revenues to offset the fall-off in ad sales.
Content moderation issues, however, continue to cloud Musk's ability to get high-profile accounts to pay for his $8 billion 'Twitter Blue' project. Fake accounts representing brands such as Chiquita, Eli Lilly and Lockheed Martin appeared on the site yesterday, and reports suggest the group's chief information security officer, chief privacy officer and chief compliance officer all left the company amid a rare public warning on data safety from the Federal Trade Commission.
4. -- TuSimple Shares Slump As Former CEO Returns To Helm
TuSimple (TSP) shares slumped lower in pre-market trading after the self-driving truck company brought back a former CEO to run the group following a probe into its ties with China-backed Hydron.
Cheng Lu, who was ousted by the group in March, will return to the San Diego-based group immediately following last week's firing of his predecessor, Xiaodi Hou.
Hou was dismissed after an internal investigation found that he had failed to disclose his relationship with Hydron and that some of its workers spent paid hours in 2021 working on matters for Hydron. The Wall Street Journal also reported that the Securities and Exchange Commission, the Federal Bureau of Investigation, and the Committee on Foreign Investment in the United States (CFIUS) were all looking into allegations that Hou shared technical information with the group and that may have defrauded TuSimple investors.
"We've dealt with turmoil this past year, and it's critical that we stabilize operations, regain the trust of our stakeholders and provide the talented team at TuSimple with the support and leadership they deserve," Lu said in a statement.
TuSimple shares were marked 3.7% lower in pre-market trading to indicate an opening bell price of $2.60 each.
5. -- Intel Slides As JPMorgan Resumes Coverage With 'Underweight' Rating
Intel Corp. (INTC) shares moved lower in pre-market trading after analysts at JPMorgan resumed their coverage of the chipmaker with an 'underweight' rating.
JPMorgan analyst Harlan Sur placed a $32 price target on the stock, noting that it may take 'several years' for the group to regain its leadership position in the sector following a series of errors in development and production and the rise of data center competitors such as Advanced Micro Devices (AMD).
Last month, Intel posted surprisingly solid third quarter earnings of 59 cents per share, but trimmed its full year sales forecast amid waning PC demand. The group also detailed cost reduction plans it said would save $3 billion in 2023 and a further $8 billion to $10 billion by 2025.
Intel shares were marked 2% lower in pre-market trading to indicate an opening bell price of $29.16 each.
