President Trump vows to end the country's reliance on trade with China; Tesla is excluded from the S&P 500; Slack and Lululemon report earnings.
Here are five things you must know for Tuesday, Sept. 8:
1. -- Stock Futures Slide Sharply
Stock futures pointed to a weaker start Tuesday after President Trump vowed to end the country's reliance on trade with China and technology shares continued their rapid descent.
Contracts linked to the Dow Jones Industrial Average fell 123 points, S&P 500 futures fell 35 points and Nasdaq futures sank 326 points.
Trump raised the idea of decoupling the U.S. and Chinese economies, and threatened to punish American companies that create jobs overseas and to prevent those that do business in China from winning federal contracts.
“We’ll manufacture our critical manufacturing supplies in the United States, we’ll create ‘made in America’ tax credits and bring our jobs back to the United States and we’ll impose tariffs on companies that desert America to create jobs in China and other countries,” Trump said Monday at a White House news conference.
The tech-heavy Nasdaq fell 3.3% last week for its worst week since March, the Dow declined 1.8% and the S&P 500 lost 2.3%.
Reports said Japanese conglomerate SoftBank has been taking huge options positions in technology shares and could have been a factor in tech's recent rally.
“Traders and investors alike may slowly but surely come around to the idea that last week’s market rout was tech sector-specific, rather than any real change in underlying sentiment,” said Stephen Innes, chief global markets strategist at AxiCorp.
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2. -- Slack and Lululemon Report Earnings
Earnings reports are expected Tuesday from Slack Technologies (WORK) - Get Report, Lululemon Athletica (LULU) - Get Report, Coupa Software (COUP) - Get Report and HealthEquity (HQY) - Get Report.
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Later in the week reports are expected from GameStop (GME) - Get Report, Peloton (PTON) - Get Report, Chewy (CHWY) - Get Report and Kroger (KR) - Get Report.
The economic calendar in the U.S. Tuesday includes the NFIB Small-Business Index for August at 6 a.m. ET. Reports later in the week include weekly Jobless Claims, the Producer Price Index and the Consumer Price Index.
3. -- Tesla Excluded From S&P 500
Tesla (TSLA) - Get Report was falling nearly 14% in premarket trading after not being chosen for inclusion in the S&P 500. Instead, Etsy (ETSY) - Get Report, equipment manufacturer Teradyne (TER) - Get Report and pharmaceutical company Catalent (CTLT) - Get Report will be joining the index, effective Sept. 21.
S&P Dow Jones Indices rebalances the index on a quarterly basis, adding new names and kicking others out.
If Tesla has been added, tracking funds and ETFs would need to acquire shares in the electric carmaker.
After Tesla's last earnings report, in which it reported its fourth straight quarter of positive earnings, the carmaker became eligible for the index. Many Tesla investors expected the stock to be included in the S&P 500 this quarter, a reason often cited as why the shares have run up so much in recent weeks.
Tesla fell 13.69% to $361.06 in premarket trading. The stock remains up about 400% this year.
4. -- FAA Reviewing Flaws in Boeing 787 Dreamliners
The Federal Aviation Administration said it was investigating manufacturing flaws involving some Boeing (BA) - Get Report 787 Dreamliners but said it was too early to say if new inspections would be needed.
The comments from the FAA to Reuters followed a report in The Wall Street Journal that said production problems at a Boeing 787 Dreamliner factory prompted the agency to review quality-control lapses potentially stretching back almost a decade.
The Journal's report cited an internal government memo and people familiar with the matter.
Boeing told the FAA that certain parts made at the aerospace giant's South Carolina plants failed to meet its own design and manufacturing standards, according to an Aug. 31 internal FAA memo reviewed by the Journal.
As a result of “nonconforming” sections of the rear fuselage that fell short of engineering standards, a high-level FAA review is considering mandating enhanced or accelerated inspections that could cover about 900 of the roughly 1,000 Dreamliners delivered since 2011, the Journal reported.
Boeing shares fell 1.82% to $167.93 in premarket trading Tuesday.
5. -- 'Tenet' Makes $20.2 Million in Opening Weekend
Christopher Nolan’s “Tenet” sold an estimated $20.2 million in tickets through the holiday weekend in U.S. and Canadian theaters, as theatergoers slowly trickled back to the movies during the coronavirus pandemic.
About 70% of U.S. movie theaters are currently open, according to the Associated Press, while those in the country’s top markets, Los Angeles and New York, remain closed. Theaters are limiting maximum capacity at 50%.
“Tenet” played in 2,810 North American locations, about three-fourths of what is typical for a major release.
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