Top 5 Things to Know in the Market on Wednesday, September 10th By

Top 5 Things to Know in the Market on Wednesday,

By Geoffrey Smith — U.S. stocks are set for a bounce at the opening after the worst one-day losses in months, but Lululemon and Slack face early pressure after their reports late on Tuesday. AstraZeneca (NYSE:) pauses trialling of its Covid-19 drug. And the U.S. and OPEC both give their two cents’ worth on the oil market before the American Petroleum Institute updates on inventories. Here’s what’s to watch in financial markets on Wednesday, September 10th.

1. Stocks set to bounce after tech rout

U.S. stock markets are set for a not-particularly-convincing bounce at the open after Tuesday’s tech-led rout, which put the firmly in correction territory.

By 6:40 AM ET (1040 GMT), the contract was up 198 points or 1.8%, while the S&P 500 contract was up 0.7 % and the contract was up 110 points, or 0.4%.

The Nasdaq Composite had fallen over 4.1% on Tuesday amid a rapid unwinding of speculative positions taken on Tesla (NASDAQ:) and the gigacap tech stocks over the summer. Tesla was indicated up 6.9% in premarket after a 21% drop – its worst ever one-day loss – on Tuesday. Apple (NASDAQ:) stock was on course to recoup about half of its losses, indicated 3.6% higher. Microsoft (NASDAQ:) stock was up 2.2%.

2. Asia falls, Europe outperforms

Global markets again went their separate ways, with the Japanese, Korean and Chinese markets all falling heavily while European ones rose.

Like the U.S., China has also witnessed a speculative, retail-driven bull market since March that now looks like it is starting to unwind: the CSI 300 fell 2.3%. The Japanese also fell 1.1%, with Softbank (OTC:) – whose heavy buying of options fuelled the U.S. summer rally – down another 2.9%.

European markets by contrast were all higher. Again, that was a function of having accompanied the U.S. lower in afternoon trading on Tuesday. The euro steadied slightly above $1.1750.

3 .AstraZeneca pauses drug trial

AstraZeneca said it will pause the phase 3 clinical trial of the drug that it is developing to treat the Covid-19 virus, in what it described as a ‘routine’ step after an unexplained adverse reaction in a single patient.

The drug, which is being developed jointly with Oxford University, has been widely tipped to be one of the first available next year. It’s the first significant setback for any of the leading vaccine candidates and a reminder of how uncertain the process of drug authorization can be.

The news comes against the backdrop of a heated argument over possible politicization of the approval process in the U.S. AstraZeneca stock fell 1.4% in London while those of some of its rivals – such as Pfizer (NYSE:), Biontech and Johnson & Johnson, rose modestly.

4. Slack, Lululemon struggle despite strong earnings 

One tech stock not bouncing in premarket is messaging app Slack, which is marked down 16% after posting disappointing earnings after the close on Tuesday (the market had had the grace not to sell it during the regular session).

The company posted record sales and raised its guidance for the year, but the results still fell short of high expectations.

Another stock failing to make the bounce is Lululemon Athletica (NASDAQ:), even though its quarterly report late on Tuesday beat analysts’ forecasts handily as it moved both sales of gear and yoga classes online more smoothly than expected.

5. Oil rebounds ahead of STEO, OPEC and API

Oil prices rebounded overnight as a degree of stability returned to risk assets. By 6:30 AM ET (1030 GMT), futures were up 2.3% at $37.61 a barrel, albeit that’s still clearly below the $40-$45 range that the market had gotten used to over the summer.

futures were up 1.5% at $40.38, after trading below $40 late on Tuesday.

Later Wednesday, the U.S. government will publish its regular Short-Term Energy Outlook while the Organization of Petroleum Exporting Countries will release its monthly oil market report.

The American Petroleum Institute’s estimate of U.S. crude supplies is also due at 4:30 PM ET.

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