Coffee With Greta: S&P Slides to Bear Market Territory
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DJIA Futures: -560 (-1.8%)
SPX Futures: -87 (-2.2%)
NASDAQ Futures: -331 (-2.8%)
Good morning friends!
Futures are falling as Fed week begins and Treasury yields jump.
Let’s get right to it!
S&P Set To Open In Bear Market
The major indexes are set to open lower, with the S&P 500 poised to open in bear market territory.
The bluechip index closed 19% off from its record high on Friday and is slipping more than 2% in premarket trade.
Traders are focused on the Fed and how aggressive the bank will act on inflation after the 8.6% CPI on Friday.
The Central Bank kicks off its two-day policy meeting on Tuesday.
Treasury Yield Curve Briefly Inverts
Treasury yields are rising as the market bets on an aggressive Fed.
The 2-year yield briefly jumped 0.02 basis points above the 10-year yield earlier this morning.
The 2-year yield is now up about 10 basis points at 3.17% while the 10-year yield is 8 basis points higher at 3.25%
The Fed is widely expected to implement another 0.5% rate hike on Wednesday.
CME Group’s FedWatch Tool shows 58.8% of traders expect a 0.5% rate hike while 41.2% are now predicting a 0.75% hike.
Coinbase Plummets As Crypto Collapses
Coinbase (COIN) shares are plunging 17% ahead of the open after a weekend of turmoil in the crypto market.
CoinGecko shows Bitcoin is down more than 12% over the past 24 hours at just over $24,000.
The coin is trading at its lowest level since December 2020.
Ethereum has dropped more than 15% to just $1,200.
And Dogecoin is down more than 16% at $0.055.
The global crypto market cap is down nearly 11% in the past 24 hours to $1.03 trillion.
More than $200 billion has been wiped off the entire crypto market since Friday.
Tesla Files For 3-for-1 Stock Split
Tesla (TSLA) shares are slipping 4.4% in premarket trade as the electric automaker follows the broader market lower.
The company proposed a 3-for-1 stock split in a proxy statement filed with the SEC on Friday.
The stock initially jumped 8% in after-hours trade following the filing Friday but failed to hold those gains ahead of the open today.
The split hinges on shareholder approval to increase Tesla’s total number of shares by 4,000,000,000.
That is set to be voted on at the August 4 shareholder meeting.
Average U.S. Gas Price Tops $5
The national average for a gallon of regular gas is officially over $5.
AAA shows that price rose to a new record high at $5.014/gal today.
It’s the first time in history the national average has been over $5.
Georgia still has the lowest average price at $4.484/gal while the average in California is up to $6.436/gal.
Oil Prices Slip On Beijing Covid Warning, Inflation Worries
Oil prices are sliding amid concerns about a Covid flareup in Beijing.
West Texas Intermediate crude futures are down 1.3% at $119 bbl while Brent crude prices are falling 1.2% to under $121 bbl.
The most populous district in Beijing announced it will undergo three rounds of mass testing until Wednesday amid a new Covid outbreak in the city.
The energy market is also worried about the possibility of a recession if the Fed gets more aggressive on inflation.
NY Fed Inflation Expectations Coming Up
The New York Fed releases its May survey of consumer expectations at 11:00 a.m. ET.
Those results include forecasts for inflation 1-year and 3-years from now.
The University of Michigan’s June consumer sentiment index last week showed consumers hiked their expectations for inflation over the next 12 months.