S&P 500 Futures Slump 1.25% as Expectations for New Stimulus Begin to Fade

The S&P futures are falling in premarket hours as investors raise concerns about efforts to release new stimulus out of Washington. Speaker Nancy Pelosi (D-Calif.) has said that the White House’s proposal falls short of her caucus’ expectations. However, corporate America is now starting to speak out against Congress’ inability to get a deal done. This morning, Walmart (WMT) CEO Doug McMillion issued a scathing rebuke of political inaction. 

“For both sides, I think what they need to keep in mind is that there are Americans that need them, that don’t really care about politics, aren’t really tied up in this election and they just need some help,” he said, in an interview on CNBC’s “Squawk Box.”

Let’s take a look at the numbers from Wednesday before we get into the headlines driving the futures market.

Here are the key headlines that are driving the Dow Futures this morning. Look for additional updates throughout the day.

The Rundown: Today’s Top Market Stories 

  • This morning, the big news is the shift in the political tides in Washington. Sure, Democrat Joe Biden remains the favorite for the November election. But the blame for a lack of stimulus progress now lays in the lap of Speaker Nancy Pelosi (D-California). A plurality of Americans now blame the Democratic leader for the delay in stimulus payment to the American people. Even media commentators like Wolf Blitzer and Chris Hayes are openly questioning Pelosi’s decision-making. The stalemate between Pelosi and the White House continues to drag on. But every day that goes by without progress only drives the state of the economy deeper into a hole. We’ll hope for some semblance of sanity to return to Washington soon.
  • This morning, the U.S. Labor Department reported that new unemployment filings came in much higher than expected. The agency said that 898,000 Americans filed for unemployment benefits last week. That figure was much higher than the 830,000 anticipated by economists. The U.S. labor market remains sluggish – with more than 800,000 seeking benefits since the onset of the COVID crisis. 
  • The threat of new lockdowns around the world is weighing on oil prices. This morning, WTI crude fell by 3.5%, while Brent crude was off another 3.2%. The recovery that so many people had hoped for in the crude market is not materializing. With cases surging across India, Europe, and South America, we could see a significant shift in expectations for OPEC, the world’s largest energy cartel. OPEC is set to cut daily production by another 2 million barrels per day in January. We could experience another significant rebalancing in the months ahead. 

COVID-19 Updates

This morning, the key COVID story driving the market is happening in Europe. Yesterday, France declared a public health emergency due to the recent spike in COVID cases. Meanwhile, London has moved into a high alert level. This means that no one in London will be allowed to meet with anyone outside their homes.

This morning, Johns Hopkins University reported that the average daily infection tally over the last seven days hit 52,345. That figure is the largest number we’ve seen since August. The rise comes at a time that we are focusing more on the potential of a vaccine reaching the U.S.

Today’s Top Stocks to Watch: MS, WBA, UAL

WBA: Shares of Walgreens Boots Alliance ticked up 1.5% this morning thanks to an uptick in expected profit growth in 2021. Before the bell, the firm reported earnings per share of $1.02, a figure that topped Wall Street expectations of $0.96. The firm also said that same-store sales at its pharmacy locations increased by 3.6%. Expect Walgreens to be a busy destination in the months ahead for flu shots and potential vaccines for COVID-19.

MS: Morgan Stanley slipped 1.2% this morning despite news that the investment bank topped earnings expectations before the bell. The firm reported earnings per share of $1.66 and revenue of $11.7 billion. Wall Street was abuzz on news that it beat revenue expectations by $1 billion. Morgan Stanley was the last major bank to report earnings this week. We’ll now turn our attention to regional and community banks in the weeks ahead. 

UAL: Shares of United Airlines reported a quarterly loss of $8.16 per share. That was a much larger loss forecasted by analysts ($7.53). They also reported revenue of $2.49 billion, but this was a figure that met expectations. The company slashed its daily burn rate to $25 million, including debt. The company was burning through $40 million per day. It’s a very difficult time for airline companies, who are now begging for a $25 billion bailout from Congress. Perhaps they should have built a rainy day fund instead of buying back stock over the last decade