What to watch today: S&P 500 poised to fall back into a bear market
BY THE NUMBERS
U.S. stock futures sank Monday after the worst week on Wall Street since January. Bond yields soared as investors braced for the Federal Reserve to increase interest rates later this week following Friday's hotter-than-expected consumer inflation data. The S&P 500 was tracking to enter bear market territory again and test this year's low of 3,810.32 last month. (CNBC)
The 2-year Treasury yield on Monday hit its highest level since 2007, trading around 3.2%. At one point, the 2-year yield briefly inverted and went above its 10-year counterpart for the first time since April. A so-called yield curve inversion is seen as an indicator of a recession. The benchmark 10-year yield later popped to 3.26%. (CNBC)
The Fed is set to hold its June meeting on Tuesday and Wednesday, with a 0.5% rate increase expected. Anything more than that would be a surprise, but there has been a belief in the markets that central bankers are going to have to get even more aggressive to quell inflation. The Fed is in a tough spot, trying to cool things off with tighter monetary policy while trying not to tip the economy into a recession. (CNBC)
IN THE NEWS TODAY
Bitcoin tumbled 14%, to below $24,000 on Monday, hitting its lowest level since December 2020, as investors dump crypto in a broader sell-off in risk assets. Over the weekend and into Monday morning, the value of the entire cryptocurrency market dropped below $1 trillion for the first time since February 2021, according to data from CoinMarketCap. (CNBC)
EV start-up Electric Last Mile Solutions (ELMS) said late Sunday it plans to file for bankruptcy protection less than a year after it went public via a merger with a special purpose acquisition company. ELMS' public offering, in late June 2021, came amid a wave of SPAC deals that took EV makers public. The company is the first of those post-SPAC electric vehicle makers to say that it will declare bankruptcy. (CNBC)
Tesla (TSLA) has laid off its Singapore country manager just over a week after the electric auto maker's CEO Elon Musk warned of global job cuts. Christopher Bousigues posted on LinkedIn on Sunday that his role had been "eliminated," saying his dismissal was related to job cuts that Tesla had already flagged. Bousigues and Tesla did not immediately respond to a request for comment when contacted by CNBC.
Members of the House select committee investigating the Jan. 6 Capitol riot were tightlipped about what to expect in this week's public hearings, giving few details beyond their road map to prove that former President Donald Trump is to blame for the efforts to overturn the 2020 election results. (CNBC)
Key senators announced a framework agreement on new gun legislation Sunday, marking a breakthrough on a collection of measures to combat gun violence, including "red flag" laws and enhanced background checks on gun buyers. The joint statement backing the deal was signed by 10 Democrats and 10 Republicans. (NBC News)
Federal health officials said Sunday that doses of Pfizer's Covid vaccines appear to be safe and effective for kids under 5. Last week the FDA posted a similar analysis of Moderna's shots for children under 6 years old, ahead of Wednesday's FDA meeting of outside experts. (AP)
STOCKS TO WATCH
Shares of the cryptocurrency exchange Coinbase (COIN) sank more than 14% amid the sharp pullback in the prices of bitcoin and other digital assets over the weekend.
Microstrategy (MSTR) dropped more than 20% in premarket trading as the price of bitcoin retreated below $24,000. Microstrategy has bet big on bitcoin and held more than 129,000 coins as of the end of March.
Silvergate Capital (SI), a crypto-focused bank, saw its stock fall more than 13% in response to the decline in bitcoin and other digital assets. Silvergate's slide came despite a positive initiation from Wells Fargo.
Big Tech stocks were down sharply in premarket trading as investors braced for a broad sell-off. Amazon (AMZN) was one of the worst performers among the megacap names, falling nearly 4%.
DocuSign (DOCU) extended its losses from Friday in premarket trading, falling more than 5%. DocuSign fell more than 24% on Friday after the company missed earnings and cut guidance. Wolfe Research downgraded the stock to underperform from peer perform over the weekend.