Coffee With Greta: Stocks Are In A Free Fall
DJIA Futures: -32 (-0.1%)
SPX Futures: -8 (-0.2%)
NASDAQ Futures: -28 (-0.3%)
Good morning friends!
Futures are lower with tech stocks sliding further after the Nasdaq closed at a fresh 2-year low on Monday.
Let’s get right to it!
Bank of England Steps In Again
The Bank of England announced an expansion of its emergency bond-buying operation today as it looks to stabilize the bond market.
The BOE said it will widen its purchases of U.K. government bonds to include index-linked gilts through the end of this week.
The move comes after the bank also increased the limit for its daily purchases on Monday.
The Bank of England said, “Dysfunction in this market, and the prospect of self-reinforcing ‘fire sale’ dynamics pose a material risk to UK financial stability.”
U.K. 10-year index-linked gilt yields surged 64 basis points on Monday as prices tumbled 5.5% while 30-year index-linked gilt prices tumbled 16%.
The sell-off stabilized after the Bank of England’s announcement.
U.S. Treasury yields are mixed today after the bond market was closed on Monday.
The 2-year yield is down 1 basis point to 4.31% while the 10-year yield is up 3 basis points to 3.92%.
Coinbase Rallies on Google Partnership
Coinbase (COIN) shares are up 5.4% ahead of the open after Google announced it will use the platform to allow some customers to pay for cloud services with crypto in early 2023.
The partnership was announced at Google’s Cloud Next conference.
Coinbase will also use Google’s cloud infrastructure for its business.
The crypto platform will move data-related applications from the Amazon Web Services cloud to Google.
Google’s Cloud Platform will start by accepting crypto payments from a handful of customers in Web3.
Those payments will be made possible by integrating with the Coinbase Commerce service, which supports 10 different cryptocurrencies.
Coinbase will earn a percentage of all transactions that go through that service.
GM Reveals New Energy Unit
General Motors (GM) shares are slipping 0.2% in premarket trade after the automaker announced a new energy business.
GM Energy will provide stationary battery packs, solar panels, EV chargers, and more to homes and businesses.
The commercial operations are already underway with the home energy systems set to be available next year as the Chevy Silverado EV goes on sale.
GM said the goal is to assist the automaker in controlling the customer experience when they purchase a new EV and create a sustainable business.
The vice president of GM’s EV growth operations said the total market of products and services being targeted by the new unit is between 125 billion and $250 billion.
The new business comes at a time of increased power grid issues across the U.S.
American Airlines Hikes Q3 Revenue Forecast
American Airlines (AAL) shares are up 4.5% ahead of the open after hiking its Q3 sales outlook.
The airline now expects last quarter’s sales to be 13% higher than Q3 2019, up from its previous forecast of a 10% to 12% increase.
American also expects a pretax margin of 4.5% vs the prior estimate of no more than 4%.
But the carrier said it still flew 9.6% fewer flights than in Q3 2019, showing passengers are just paying higher prices for flights.
American will report Q3 results before the market open on October 20.
Recession Fears Grip Oil Market
Oil prices are sliding further today as recession fears and worries about Covid restrictions in China take over.
West Texas Intermediate crude futures are down 1.2% to $90 bbl while Brent crude futures are down 1% to $95 bbl.
The World Bank President and the IMF Managing Director both warned Monday that the global economy is at growing risk of a recession.
Demand is also expected to fall further in China as a flare-up in Covid cases prompts new restrictions.
In Case You Missed It
- JPMorgan Chase (JPM) CEO Jamie Dimon warned Monday that the U.S. economy would likely be in a recession by mid-2023. He told CNBC the economy is “actually still doing well” currently and said consumers are in better shape for this recession vs the 2008 financial crisis. Dimon said the Fed “waited too long and did too little” as inflation soared early on but now the central bank is “clearly catching up”. He said the S&P 500 could fall by “another easy 20%” and “the next 20% would be much more painful than the first”.