Here are the most important news, trends and analysis that investors need to start their trading day:
- Stock futures fall as the 10-year Treasury yield tops a 3-year high
- BofA issues stronger earnings as it releases reserves for soured loans
- Elon Musk’s tweet suggests an appeal directly to Twitter shareholders
- China’s first-quarter GDP beats estimates despite Covid lockdowns
- Russian strikes kill at least 7 people in Lviv, Ukrainian officials say
1. Stock futures fall as the 10-year Treasury yield tops a 3-year high
U.S. stock futures fell Monday, especially tech names — hurt by the 10-year Treasury yield rising to a more than three-year high of around 2.87%. Back-to-back inflation reports last week showing sharply rising prices further fueled bond yields. Bank of America rose in the premarket after beating estimates with quarterly earnings. Other major companies are set to release financial results in the week ahead including Netflix, Tesla, Procter & Gamble, Johnson & Johnson, Verizon as well as United and American airlines. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq all capped a holiday-shortened week with losses. The tech-heavy Nasdaq fell over 2% on Thursday and dropped more than 2.6% for the week.
2. BofA issues stronger earnings as it releases reserves for soured loans
Bank of America, the last of the major banks to report earnings, on Monday delivered a better-than-expected 80 cents per share profit on revenue of $23.33 billion. BofA’s decision to release $362 million in loan-loss reserves was in contrast to JPMorgan Chase, which disclosed last week that it opted to build reserves by $902 million. JPMorgan said profit also slumped due to losses tied to Russia sanctions. Goldman Sachs, Morgan Stanley and Citigroup each topped expectations with stronger-than-expected trading results. Wells Fargo missed on revenue as mortgage lending declined.
3. Elon Musk’s tweet suggests an appeal directly to Twitter shareholders
Elon Musk posted a tweet Saturday, saying “Love Me Tender,” days after making an unsolicited $43 billion cash offer to buy Twitter. After a TED talk Thursday, Musk hinted at the possibility of a hostile bid in which he would bypass Twitter’s board and put the offer directly to shareholders.
The tweet seemed to imply Musk, the world’s richest person and CEO of both Tesla and SpaceX, might seek to buy shares from investors in what’s called a tender offer. Twitter on Friday adopted a “poison pill” to limit Musk’s ability to raise his stake in the company. Shares of Twitter rose more than 3.5% in the premarket.
4. China’s first-quarter GDP beats estimates despite Covid lockdowns
China’s first-quarter gross domestic product grew a faster-than-expected 4.8% despite the impact of Covid lockdowns in March. Beginning last month, China struggled to contain its worst Covid outbreak since the initial phase of the pandemic in 2020. Three people have died as of Sunday, officials of locked-down Shanghai said, attributing the fatalities to preexisting health conditions. Shanghai began a two-stage lockdown and mass virus testing in late March that was supposed to stop after just over a week later. But authorities have yet to set an end date.
5. Russian strikes kill at least 7 people in Lviv, Ukrainian officials say
Russian missiles hit Lviv in western Ukraine on Monday, killing at least seven people, Ukrainian officials said, as Moscow’s troops stepped up strikes on infrastructure in preparation for an all-out assault in the east. Mariupol, the besieged eastern city, has refused Russia’s demand to surrender. The mayor of Mariupol said last week that 10,000 civilians have died there. “The targeting of populated areas within Mariupol aligns with Russia’s approach to Chechnya in 1999 and Syria in 2016,” the U.K. Ministry of Defense said in an intelligence update.
— CNBC’s Hannah Miao, John Melloy, Sarah Min, Tanaya Macheel, Hugh Son, Evelyn Cheng, Natasha Turak and Ted Kemp as well as Reuters and The Associated Press contribute to this report.