Coffee With Greta: Were Traders On The Nice List?
DJIA Futures: +76 (+0.2%)
SPX Futures: +3 (+0.1%)
NASDAQ Futures: -29 (-0.3%)
Good morning friends!
Futures are mixed as traders hope for a Santa rally to close out the year.
Let’s get right to it!
Southwest Slides After Canceling Thousand of Flights
Southwest Airlines (LUV) shares are sliding 4.1% ahead of the open after the company canceled thousands of flights over the weekend.
The airline canceled more than 70% of its flights Monday and has already canceled 60% of the flights scheduled for today.
Southwest said it would operate only one-third of its schedule “for the next several days”.
In comparison, Delta (DAL) canceled just 9% of its flights Monday, United (UAL) canceled 5%, and American (AAL) canceled less than 1%.
The Department of Transportation said it is looking into why Southwest had so many more cancellations than other airports.
The Department said in a statement, “As more information becomes available the Department will closely examine whether cancellations were controllable and whether Southwest is complying with its customer service plan as well as all other pertinent DOT rules.”
China To Scrap International Traveler Quarantine
Chinese stocks listed in the U.S. are rising in premarket trade as the country is set to scrap its zero-Covid policy.
Alibaba (BABA) shares are up 1.4%, JD.com (JD) shares are rising 1.8%, and Pinduoduo (PDD) shares are up 1.8%.
China announced Monday that international travelers will no longer be required to quarantine upon arriving to the country starting January 8, 2023.
This is the final change to end the bulk of China’s zero-Covid policy that has restricted citizens and visitors.
Travelers to China previously had to quarantine in a hotel for 14 to 21 days upon arrival.
Current policy requires 5 days of quarantine at a centralized facility and three days at home.
The new policy will only require travelers to show a negative Covid test from within the last 48 hours.
China’s National Health Commission also said starting January 8, authorities would stop tracking close contacts of Covid patients, stop the designation of certain areas as Covid risk areas, and cancel Covid measures that had slowed imports.
Tesla Extends Recent Slide
Tesla (TSLA) shares are tumbling 5.3% ahead of the open, extending the stock’s recent slide.
The latest drop comes after news that the electric automaker will plans to run a reduced production schedule at its Shanghai factory in January.
That follows a complete suspension of production during this final week of December.
The production cuts are likely linked to lower demand in China but Tesla hasn’t responded to requests for comment.
Chinese competitor Nio (NIO) also cut its delivery outlook for the fourth quarter this morning, citing headwinds in China.
Nio shares are down 5.3% in premarket trade after saying it expects to deliver between 38,500 and 39,500 vehicles this quarter vs previous expectations for 43,000 to 48,000.
Quiet Week of Data
It will be a quiet week of economic data mostly focused on the housing market.
Both the S&P Case-Shiller and the Federal Housing Finance Agency’s housing price indexes for October will be released at 10:00 a.m. ET today.
Then the National Association of Realtors reports November pending home sales on Wednesday.
The Labor Department releases weekly jobless claims on Thursday.
It is a holiday-shortened trading week after the stock market was closed on Monday.
In Case You Missed It
- Consumer sentiment improved more than expected in late December. The University of Michigan’s consumer sentiment index rose to 59.7 from a flash reading of 59.1. That was better than economists’ expectations for the index to be unchanged. Short-term inflation expectations also improved with respondents saying they expect inflation to be at 2.9% one year from now vs 3% previously.
- New home sales unexpectedly rose in November. The Commerce Department reported new home sales rose 5.8% to a seasonally adjusted annual rate of 640,000 units. That was up from the revised SAAR of 605,000 in October and better than expectations for 600,000. New home sales were still down 15.3% year over year.