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The Monday Market Minute

  • Global stocks mixed as investors look to put last week’s volatility behind them, but concerns over faster inflation in the west, combined with a renewed coronavirus spike in Asia, have markets in a cautious mood.
  •  AT&T is reportedly ready to merger its media assets with Discovery in a deal that could be worth $150 billion and challenge the market leadership of Disney and Netflix.
  • Bitcoin falls to the lowest levels since February after Tesla CEO Elon Musk Tweets hints that he could sell his $1.5 billion holdings.
  • Benchmark 10-year Treasury note yields ease to 1.618% while the dollar index edges 0.02% lower to 90.29.
  • CDC data shows 123.2 million Americans have now been fully vaccinated against the coronavirus, with around 273. million doses administered as of Wednesday.
  • U.S. equity futures suggest a modestly weaker open on Wall Street heading into a light week for economic data highlight by Fed minutes Wednesday and March quarter earnings from Walmart, Target, Home Depot and Lowe’s.

Wall Street futures edged lower Monday, while Treasury yields eased and the dollar drifted south, as investors looked for more stable markets following last week’s roller-coaster for U.S. equities, while eyeing merger talks that could create one of the world’s biggest media groups.

Inflation concerns, weak retail sales and a disappointing April jobs report all combined to pull Wall Street into a tailspin last week, with the three-day stretch between Monday and Wednesday notching the biggest declines since last October. Equity volatility also spiked to multi-month highs while benchmark 10-year Treasury notes yields edged past the 1.7% mark for the first since since late April. 

Many of the same inflation concerns remained imbedded in financial markets this week, but with a light calendar of economic data releases, focus will instead shift to the release of minutes from the Federal Reserve’s April rate-setting meeting on Wednesday for either a firm reiteration of the central bank’s policy stance or an acknowledgement that faster inflation may trigger changes to its low-rate, high liquidity strategy.

In the meantime, March quarter earnings from big box retailers such as Walmart  (WMT) – Get Report, Target  (TGT) – Get Report, Home Depot  (HD) – Get Report and Lowe’s  (LOW) – Get Report will round out a stellar reporting season in which profits have risen 50.6% to a collective $407.8 billion.

Near-term focus is also likely to center on the media sector, with reports suggesting AT&T  (T) – Get Report is set to merge its own media assets — which include HBO and HBO Max — with Discovery  (DISCA) – Get Report in a deal that could be worth as much as $150 billion. 

Discovery shares were marked 11.4% higher in pre-market trading Monday to indicate an opening bell price of $39.83 each while A&T bumped 1.8% higher to $32.82 each. 

On Wall Street, however, futures markets were pointing to a modestly weaker open with contracts tied to the Dow Jones Industrial Average indicating an 80 point decline and those linked to the S&P 500 priced for a 9 point pullback.

Nasdaq Composite futures, meanwhile, were suggesting a 40 point slip for the tech-focused benchmark, which is up just 4.2% for the year.

Away from equities, bitcoin prices fell to the lowest levels in three-months, hitting $42,185 each in overnight trading, after Tesla  (TSLA) – Get Report founder and CEO Elon Musk Tweeted a suggestion that his clean-energy car company could sell the $1.5 billion it holds in the digital currency after criticizing its energy use in an earlier Tweet last week. 

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.03% lower at 92.29 in early New York trading, while benchmark 10-year Treasury note yields slipped to 1.618%.

Oil prices were also steady, edging modestly higher in the wake of a weaker U.S. dollar and soothed by the re-opening of the Colonial Pipeline late last week, which could boost supplies and support gasoline demand heading into the Memorial Day weekend later this month.

WTI futures contracts for June delivery were marked 15 cents higher at $65.52 per barrel while Brent contracts for July rose 13 cents to $68.84 per barrel.

In overseas markets, European stocks were little-changed in early Monday trading, although Britain’s FTSE 100 fell 0.4% even as the economy officially eased a host of business and gathering restrictions put in place to slow the coronavirus pandemic earlier this year.

In Asia, stocks were mixed following weaker-than-expected economic data from China — which showed a slowing in retail sales and factory output last month — and a worrying rise in coronavirus infections in Singapore and Taiwan.

Japan’s Nikkei 225 closed 0.92% lower at 27,842.83 points while the region-wide MSCI ex-Japan benchmark was 0.907% higher heading into the final hours of trading.