Chipotle Mexican Grill Inc.

What to Watch Today: Markets Look Lower on Concerns Over China Growth and Fed Taper

Andrew Kelly | Reuters

BY THE NUMBERS

Dow futures fell more than 110 points to start the week, with investors concerned about potential slow growth in China as a sign of global economic weakness. Retail sales in China rose at an 8.5% clip year over year, which was slower than the 11.5% expectation and likely a reflection over fears about the Covid-19 delta variant. Despite the pandemic fears, U.S. stocks have set a series of new highs over the past month. Investors this week will be watching for news out of the Federal Reserve's annual symposium in Jackson Hole, Wyoming.

Bond yields moved mostly lower Monday morning around concerns about economic growth. The benchmark 10-year Treasury yield sat around 1.28%, after hitting 1.38% last week. Yields will be especially sensitive to news coming out of the Fed, with the fixed income market concerned about when the central bank will start curtailing its monthly bond-buying program. There's building momentum within the Fed to announce a taper in the next couple months and possibly starting the reduction by the end of the year.

Sonos shares jumped more than 10% premarket following an International Trade Commission ruling that Google had infringed on some of the company's patents for its high-end speakers. Coinbase saw its shares climb as the rally in cryptocurrencies has regained its momentum.

* There's growing support within the Fed to announce tapering in September
* Retailers begin reporting this week, but the delta variant is a big wild card

IN THE NEWS TODAY

Chaos gripped Afghanistan as the last remaining U.S. troops were airlifted from the country, which faces Taliban rule again, 20 years after the 9/11 terror attacks and the U.S. invasion that overthrow the militant regime. Thousands of Afghans massed at Kabul's international airport in an effort to escape, just months after President Joe Biden said such a scene was unlikely. The White House has cited the inability of Afghan security forces to stem the uprising as a key to the unrest.

The cryptocurrency market cap topped $2 trillion for the first time since mid-May as its principal asset, bitcoin, roared past $48,000. The crypto market has faced a number of headwinds over the summer, including renewed regulatory scrutiny from China. That was one of the biggest reasons for bitcoin dropping below the $30,000 level, which appears to be a re-entry point for crypto enthusiasts.

STOCKS TO WATCH

BHP (BHP) – The world's biggest mining company said it is in talks to sell its petroleum business to Australian oil and natural gas producer Woodside Petroleum, with BHP also considering other options for the unit. Its shares fell 1.8% premarket.

T-Mobile US (TMUS) – The wireless carrier said it is investigating claims in an online forum of a data breach that involves the personal data of over 100 million users. The post itself doesn't mention T-Mobile but Vice Media quotes the purported hacker as saying the data came from T-Mobile servers.

Chipotle Mexican Grill (CMG) – Raymond James lowered its rating on the restaurant chain's shares to "outperform" from "strong buy." The firm said the ratings cut is based entirely on valuation after a 37% jump in the stock over the past six weeks.

Hyatt Hotels (H) – Hyatt is buying resort operator Apple Leisure Group from private-equity firms KKR (KKR) and KSL Capital Partners for $2.7 billion. Apple Leisure is the operator of the Secrets, Dreams and Breathless Resorts & Spa chains.

The Honest Company (HNST) – The maker of personal care products was upgraded to "buy" from "neutral" at Guggenheim Securities, citing valuation after a more than 28% tumble for the stock Friday. That followed a quarterly report for the company that showed a wider-than-expected loss.

Tencent Music Entertainment (TME) – The music streaming service plans to halt its planned $5 billion initial public offering amid the ongoing regulatory crackdown by the Chinese government, according to Japan's Nikkei news service. Tencent shares slid 1.3% in premarket action.

Seagate Technology (STX) – The hard disk drive maker's shares added 1.3% in premarket trading after UBS upgraded the stock to "buy" from "neutral," citing positive cyclical and structural dynamics in the industry.

Oatly (OTLY) – The oat milk producer reported a quarterly loss of 11 cents per share, one cent a share wider than expected. Revenue came in slightly below Wall Street forecasts. Oatly said it was able to overcome both Covid and manufacturing-related headwinds during the quarter, and that it is successfully executing its planned expansion of manufacturing capacity. Oatly shares rose 1% in the premarket.

Copyright CNBCs - CNBC
Contact Us