Here’s what you need to know before markets open.
1. Tesla stock tanks after the automaker’s surprise exclusion from the S&P 500. Elon Musk’s electric-vehicle maker was snubbed while Etsy, Teradyne, and Catalent are set to join the benchmark index.
2. Veteran bull Ed Yardeni says stocks can fall another 10-15% but the market will then make a ‘comeback’. “I’m actually somewhat comforted by the market taking a break here. It’s a healthy development,” the economist said of last week’s sell-off.
3. Goldman Sachs says Wall Street’s fear gauge is flashing a warning sign unseen since the dot-com crash in 2000. Strong volatility in tech stocks and investor concerns over the US election results are key factors pushing the volatility index higher, analysts said.
4. Bank of America lays out the under-the-radar indicators showing that huge swaths of the stock market are ‘running on fumes’ – and warns a September meltdown may just be getting started. These indicators have only gotten worse since the start of the summer – and now the stock market is starting to buckle under pressure.
5. Goldman Sachs says buy these 19 stocks right now for big future gains once a COVID-19 vaccine is available. Chris Hussey lays out groups of stocks that should all bring in strong returns after a COVID-19 vaccine is introduced.
6. ‘Never been so extreme’: A renowned stock bear says today’s ‘hypervalued’ market implies the worst market returns in history – and expects a 66% crash from today’s levels. “The difference between the current S&P 500 and valuation norms has never been so extreme,” said John Hussman.
7. Warren Buffett’s Berkshire Hathaway cuts Wells Fargo stake to 17-year low. The billionaire investor’s company owns $3.4 billion of the bank’s stock, a fraction of the $27 billion worth it held in 2016.
8. Global stocks are mixed. In Europe, Germany’s DAX fell 0.9%, Britain’s FTSE 100 fell 0.3% and the Euro Stoxx 50 fell 1.2%. In Asia, China’s Shanghai Composite rose 0.7%, Hong Kong’s Hang Seng rose 0.2%, and Japan’s Nikkei rose 0.8% at the close. In the US, futures underlying the Dow Jones Industrial Average, the S&P 500, and the US Tech 100 fell between 0.1% and 1.9%.
9. Earnings expected. Lululemon and Slack are highlights.
10. On the data docket. The US 3-month, 6-month, and 52-week bill auctions are due.
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