Here are five things you must know for Wednesday, September 28:
1. — Stock Futures Resume Slump On Rate Hike, Recession Concerns
U.S. equity futures slumped lower again Wednesday, extending their recent slide into a seventh consecutive session decline and the longest in more than two years, as investors continue to dump risk assets around the world amid concerns over rising interest rates and near-term recession.
World stocks, in fact, are trading at their lowest levels in more than two years as the dollar — the principal beneficiary of the current risk-off sentiment — continues to print fresh twenty year peaks against its global currency peers.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.4% higher in overnight trading at 114.583 benchmark 10-year Treasury note yields topped 4% for the first time since 2008.
The dollar’s relentless climb added further downward pressure on oil prices, which were also in the red as traders discounted near-term demand from some of the world’s biggest energy buyers, sending WTI crude closer to $78 a barrel, the lowest in 9 months, during overnight dealing.
Staying in currency markets, the pound resumed its slump against both the dollar and other major peers as investors, analysts and ratings agencies lined-up in criticism against the new government’s plans to cut taxes and increase borrowing in the face of a looming recession.
Moody’s Investors Service said the U.K.’s credit rating was at risk from the plans, while media reports indicated the the government is asking banks not to bet against the pound as it hovers near historic lows against the dollar at 1.0673.
Market volatility is also back with a vengeance as the Vix index, also known as Wall Street’s ‘Fear Gauge’ jumped 5.4% in overnight trading to a near six-month high of 34.01 points.
In Europe the region-wide Stoxx 600 was marked 1.6% lower in early Frankfurt trading while Britain’s FTSE 100 slumped 1.75%.
On Wall Street, futures contracts tied to the S&P 500 are indicating a 20 point opening bell decline, while linked to the Dow Jones Industrial Average are priced for a 95 point slump. Futures tied to the tech-focused Nasdaq are indicating a 115 point move to the downside.
2. — Apple Shares Slide On Report of Waning iPhone Demand
Apple (AAPL) shares moved notable lower in pre-market trading following a report that suggested the world’s biggest tech company will scrap plans to boost iPhone production amid fading consumer demand.
Bloomberg reported Wednesday that Apple has instructed suppliers and assemblers to pare back plans to boost production of the newly-launched iPhone 14 by as many as 6 million units, opting instead to chase a target of 90 million — roughly in-line with last year’s tally — for the second half of this year.
Last week, Apple unveiled plans to boost App Store prices in Europe and Asia after launching its news suite of iPhone 14s, which were priced at the same levels as last year’s iPhone 13 for U.S. customers.
Apple shares were marked 4% lower in pre-market trading to indicate an opening bell price of $145.80 each..
3. — Biogen Shares Soar After Positive Results From Alzheimer’s Trial
Biogen (BIIB) shares rocketed higher in pre-market trading after the drugmaker and its Japan-based partner Eisai Co Ltd. unveiled better-than-expected results from a late-stage stud of their developing Alzheimer’s treatment.
Biogen said the drug, known as lecanemab, improved the slowdown in cognitive function and functional decline of patients with early-stage Alzherimer’s disease, when compared to use of a placebo in a trial of around 1,800 patients.
Eisai said it will apply for full approval of the treatment with the U.S. Food & Drug Administration last this year, with an aim for commercial use of the drug in late 2023.
“Today’s announcement gives patients and their families hope that lecanemab, if approved, can potentially slow the progression of Alzheimer’s disease, and provide a clinically meaningful impact on cognition and function,” said Biogen CEO Michel Vounatsos.
Biogen shares were marked 43% higher in pre-market trading to indicate an opening bell price of $283.00 each.
4. — Elon Musk Seeks To Overturn SEC Rule on Twitter Vetting
Elon Musk filed papers with a Federal court late Tuesday seeking to overturn a ruling by the U.S. Securities and Exchange Commission that requires the vetting of the Tesla (TSLA) CEO’s activity on Twitter (TWTR) .
Musk, who signed a so-called ‘consent decree’ with the SEC in 2018 following a probe into Tweets he shared about taking Tesla private with secured funding, asked the 2nd U.S. Circuit Court of Appeals in Manhattan to remove what lawyers called a “government-imposed muzzle” that was an unfair limit to his free speech.
The SEC had followed-up its probe into Musk after he asked his then near 70 million followers in November of last year whether he should sell 10% of his stake in Tesla in order to meet a tax liability.
“Under the shadow of the consent decree, the SEC has increasingly surveilled, policed, and attempted to curb Mr. Musk’s protected speech that does not touch upon the federal securities laws,” his lawyer’s argued. “Any objective served by the pre-approval provision has been served.”
Tesla shares were marked 2.3% lower in pre-market trading to indicate an opening bell price of $276.30 each.
5. — Hurricane Ian To Slam Florida Coast As Category 4 Storm
The National Hurricane Center said Wednesday that Hurricane Ian, which is now rapidly approaching the west coat of Florida, will make landfall in the coming hours with windspeeds of up to 140 miles per hour.
Hurricane Ian, now considered an “extremely dangerous” Category 4 storm on the Saffir-Simpson Hurricane Wind Scale, is likely to hit just north of Ft. Myers later today — a similar path to Hurricane Charley in 2004 — before turning north towards Orlando and Jacksonville as it sweeps through the state with torrential rains, tornadoes and the potential for flash-flooding.
More than 2.5 million Floridians have been evacuated ahead of the impact, with Governor Ron DeSantis pledging troops, electrical linemen and extended support for those seeking shelter to what he said could be an ‘historic’ storm.
“Your time to evacuate is coming to an end. You need to evacuate now. You’re going to start feeling major impacts of this storm relatively soon,” DeSantis said during a media event late Tuesday. “Now is the time to do it, and now is the time to act.”
