The stock market is lower Monday, but futures cut losses moving into the start of trading as excitement about a possible Twitter deal helped sentiment.
Twitter is rallying on reports that the company may accept Elon Musk’s offer of $54.20 per share as early as today.
“Take the money and run, there’s no other offer coming after this,” Moffett Nathanson’s Michael Nathanson said on Bloomberg TV.
Global stocks started the week on the back foot after sharply selling in China on signs Beijing may have to widwen its lockdown. The Shanghai Composite (SHCOMP) -5.1% saw its biggest one-day drop since February 2020, while the CSI 300 Index (SHSZ300) -4.9% fell to its lowest level since May 2020.
The U.S. dollar is up nearly 1% against the yuan.
“There is no shortage of blood on the financial market dancefloor this morning,” SocGen’s Kit Juckes wrote. “A poor equity market close on Friday rather set us up for it, but the war in Ukraine, the threat to the Chinese economy of Covid restrictions, and the monetary policy rhetoric, led by the Fed but followed all over the world, make a potent cocktail.”
“The straw to cling to, is that it’s Monday, and this is, mostly, an extension of a move based on last week’s concerns, rather than a new move. It’s not much of a straw because the key themes aren’t going to change.”
The prospect of further global supply chain disruptions is pushing stock volatility higher and cash is moving away from risk. The S&P VIX is above 29.
The risk-off move arrested the selloff in Treasuries, with yields moving sharply lower.
The 10-year yield is down 9 basis points to 2.82%, while the 2-year is off 11 basis points to 2.61%.
“There’s nothing like a brace of uncertainty to cause a surge of worry among traders and investors to take markets lower and to test investors’ resolve,” Oppenheimer strategist John Stoltzfus said. “Notwithstanding several powerful periodic rallies, thus far 2022 has been a year in which equities and bonds have had the proverbial ‘kitchen sink’ hurled their way.”
“That said, given consideration of what has come to pass and the near-term risks that overtly present themselves the markets are not surprisingly in our view right about where they should be.”
See the stocks making the biggest moves this morning.