Dow futures down 400, waiting on Congress, ‘limit down’ again

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A trader works on the floor of the New York Stock Exchange in New York, the United States, March 18, 2020.

Michael Nagle | Xinhua News Agency | Getty Images

8:00 am: Coronavirus stimulus bill fails in key Senate procedural vote

A funding package to combat the economic impact of coronavirus did not get enough votes in a key Senate procedural vote Sunday evening, after Democratic leaders warned that the bill did too much to bail out companies and not enough to help workers. The final vote tally was 47-47, well short of the 60 votes needed to advance the bill. Republicans hold a 53-47 majority in the chamber, although several GOP senators were not present to vote due to coronavirus isolation.

House Speaker Nancy Pelosi said the Democrats would be introducing their own bill. President Trump expressed optimism that lawmakers would eventually reach a deal.

Aperture Investors founder and CEO Peter Kraus said on CNBC’s “Squawk Box” on Monday that he recalls the Senate didn’t pass the first TARP bill during the financial crisis, and the market fell. “There are going to be 2 million to 3 million Americans out of work. I think there are both Republicans and Democrats in that crowd. We need to pass a bill,” said Kraus. – Fitzgerald

7:59 am: Volatility Index rises as week begins

The Cboe Volatility Index rose about 6 points on Monday morning to break back above 70. The index, which measures the volatility implied by S&P 500 options trading, set record highs last week but closed on Friday at 66.04. — Pound

7:57 am: 3M shares rise after company says it’s doubled mask production

Shares of industrial conglomerate 3M rose in premarket trading after its chief executive said the company has doubled global production of N95 respirators to about 100 million a month. CEO Mike Roman said Sunday that the company expects 3M to nearly double its capacity again within the next 12 months and is coordinating with the U.S. government to explore other manufacturing, including hand sanitizers and disinfectants. “As a global company, we also manufacture respirators in Europe, Asia and Latin America, and our products are being similarly deployed to support the COVID-19 response in those respective regions,” said Roman. — Franck

7:54 am: Boeing rises after Goldman’s bold upgrade

Shares of Boeing climbed 2.5% in premarket trading on Monday after Goldman Sachs upgraded the U.S. plane maker to buy from neutral, saying the company has enough cash to recover and demand for air travel will return to normal once the coronavirus crisis is over.

“We think Boeing will remain a going concern,” Goldman analyst Noah Poponak said in a note on Sunday. “We think travel by flight will be as popular as ever once COVID-19 is resolved. We therefore think shares of BA should be procured at the current price … Substantial fear priced in, while long-term secular growth intact.”

Boeing’s stock plunged 70% in 2020 so far, making it the worst performing S&P 500 stock over a $50 billion in market capitalization, Goldman noted. Boeing said on Friday it will cancel CEO pay, suspend its dividend and extend a pause on share buybacks amid the pandemic. It is pursuing $60 billion in U.S. government aid for the aerospace industry, including loan guarantees. — Li

7:45 am: Oil extends declines after worst week since 1991

Oil prices moved lower on Monday, extending recent losses that saw U.S. West Texas Intermediate crude post its worst week since 1991. On Monday, WTI shed 1.86% to trade at $22.21 per barrel, while international benchmark Brent crude fell 6% to trade at $25.36 per barrel. In a volatile day of trading, WTI first dropped 6%, and then recovered those losses to turn positive, before once again moving lower.

Prices have dropped as the coronavirus outbreak has slowed worldwide travel and business activity, just as powerhouse producers Saudi Arabia and Russia prepare to ramp up production. WTI crude futures have been cut in half this month. The rapid decline in crude prices is wreaking havoc on the financial markets, forcing investors to sell other assets such as Treasuries or equities indiscriminately to cover the losses in their energy positions. — Stevens

7:10 am: Stocks set to fall, Dow futures down 500

Markets were set to decline at the open on Monday as investors wait on an economic stimulus and rescue plan from the U.S. government to combat damage from the coronavirus. A fiscal stimulus bill failed a key procedural Senate vote Sunday, sending equities downward. The Dow Jones Industrial Average futures dropped more than 500 points. S&P 500 futures were off by nearly 3%. Nasdaq 100 futures declined by 2.6%. Futures were well off their worst levels of the overnight session, where they hit their “limit down” levels, falling 5%.

Last week, stocks suffered their biggest one-week decline since the financial crisis in 2008, with the S&P 500 dropping more than 13%. Those losses put the broad market average more than 32% below its record set on Feb. 19. —Fitzgerald 

— with reporting from CNBC’s Thomas Franck and Jesse Pound. 

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2020-03-23 12:10:55

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