1. Nasdaq futures fall as tech stocks continue to sink
Tech stocks extended their worst rout since March, with Nasdaq futures tracking for a nearly 3% decline at Tuesday’s open. A plunge of that magnitude at the close would bring a three-session loss in the Nasdaq to the brink of a correction, down nearly 10% from Wednesday’s record high.
Dow and S&P 500 futures were also pointing to lower opens, but not nearly as severe as the Nasdaq. The Dow Jones Industrial Average, S&P 500 and Nasdaq dropped Friday ahead of the long Labor Day holiday weekend. For all of last week, the three benchmarks were lower.
Shares of Softbank sank 7% in Tokyo on Tuesday after a weekend of reports that the Japanese conglomerate made a huge bullish bet on tech stocks. The Wall Street Journal said Softbank used options linked to as much as $50 billion in tech stocks, driving up volumes and contributing to a trading frenzy.
2. Nikola shares skyrocket; Tesla shares crater
Shares of Nikola, already up 244% as of Friday’s close, shot up over 30% in the premarket after Tuesday morning’s announcement that General Motors is taking an 11% stake in the electric truck maker. The companies are forming a strategic partnership, starting with GM manufacturing Nikola’s upcoming Badger pickup truck. Shares of GM were also soaring more than 6% in premarket trading.
Shares of Tesla, up nearly 400% in 2020 as of Friday’s close, plunged 15% in Tuesday’s premarket after the S&P Dow Jones Indices committee bypassed the electric auto maker for inclusion in the S&P 500 the end of last week. Online crafts marketplace Etsy, semiconductor equipment maker Teradyne and pharmaceutical technology provider Catalent were added to the S&P 500, while H&R Block, Coty and Kohl’s were removed.
3. Vaccine makers pledge to uphold scientific standards
Nine leading U.S. and European vaccine developers, including Pfizer, GlaxoSmithKline and AstraZeneca, pledged Tuesday to uphold scientific standards as they look to develop coronavirus immunizations as quickly as possible.
The unusual move came after the U.S. FDA chief said last month that the normal approval process may be bypassed for a Covid-19 vaccine as long as officials were convinced the benefits outweigh the risks, prompting a call for caution from the World Health Organization. Skeptics have raised questions about the credibility of the Trump administration, saying they fear President Donald Trump will disregard safeguards to speed development of a vaccine as Election Day nears.
Developers globally have yet to produce large-scale trial data, yet Russia granted approval to a vaccine last month, prompting some Western experts to criticize a scientific vigor.
4. Trump and Biden square off on Labor Day
During a swing through battleground state Pennsylvania on Monday, Democratic presidential nominee Joe Biden said that workers live by an “American code,” and Trump “lives by a code of lies, greed and selfishness.” Biden also called Trump’s alleged remarks about fallen soldiers being “losers” and “suckers” un-American.
Trump predicted a sharp economic rebound next year, saying Monday the U.S. is “rounding the final turn” on the coronavirus pandemic. Speaking to reporters from the White House, Trump touted Friday’s report that showed a sharp drop in the August unemployment rate. The president also further denied what he called “phony” recent press reports that quoted unidentified sources saying Trump disparaged veterans. The report by The Atlantic were confirmed by other news organizations, including Fox News.
5. Stimulus remain stalled but government shutdown avoided
Talks over another coronavirus stimulus bill between top Democrats and the Trump administration that broke off last month remain stalled as lawmakers return to Washington from summer recess. The bipartisan unity that drove almost $3 trillion in Covid-19 rescue legislation this spring has been replaced by a return to Washington dysfunction.
However, Treasury Secretary Steven Mnuchin said Sunday that a deal between the White House and Congress would fund the government through the beginning of December to avoid a federal agency shutdown when the current money runs out Sept. 30. Details on the so-called continuing resolution are expected to be finalized by the end of the week.
By Matthew J. Belvedere