Here are five things you must know for Tuesday, March 15:
1. -- Stock Futures Move Lower Amid Russia, Fed and China Risks
U.S. equity futures moved lower Tuesday, while oil prices fell to a two-week low and Treasury bond yields clicked higher, as investors navigated a series of headline risks linked to China's Covid outbreak, an intensifying war in Ukraine and the start of the Federal Reserve's two-day policy meeting.
Confirmed coronavirus cases in China doubled on Monday, taking the overall tally past 120,000, as officials moved to add further business and travel restrictions in the world's second-largest economy as part of its 'zero Covid' policy.
The outlook clouded an otherwise solid set of industrial and consumer data and hammered domestic stocks, with the sentiment spilling over into the European session.
Russia's intensifying war on Ukraine added to broader market concerns, with reports of explosions in and around the capital Kyiv following an overnight attack on a TV tower in the country's norther region. U.S. officials remain concerned that Moscow is seeking financial and military assistance from China, while the UK has warned the Russia may be contemplating the use of chemical weapons in the weeks ahead.
Closer to home, the start of the Fed's policy meeting, which is nearly certain to end tomorrow with a 25 basis point rate hike, has investors looking for clues as to how the central bank will manage the myriad risks linked to growth and inflation heading into the second half of the year.
Benchmark 10-year Treasury note yields rose to 2.11% in overnight trading ahead of a key reading of factory gate inflation at 8:30 am Eastern time, while WTI crude futures for April delivery fell another $5.39 per barrel to $97.62 in London trading.
On Wall Street, futures futures contracts linked to the Dow Jones Industrial Average, which eked out a mere 1 point gain last night, are indicating an 80 point opening bell decline while those linked to the S&P 500, which is down 12.44% for the year, are priced for an 8 point move to the downside.
The tech-focused Nasdaq Composite, which is just a few points shy of sliding into bear market territory, is priced for a 10 point decline as benchmark 2-year Treasury note yields rise to $1.841% in overnight trading.
2. -- Oil Prices Extend Slide As China Covid Surge Tames Demand
Global oil prices stumbled to a two-week low Tuesday, putting U.S. crude well below the $100 per barrel mark, as investors continue to pare bets on near-term demand amid a resurgence in Covid infections in China.
With more than 51 million people under lockdown orders in the world's biggest energy market, and health officials warning of the worst outbreak since the Wuhan epicenter of 2020, China's Covid surge could cripple oil and gas demand over the summer months.
Supply concerns, meanwhile, were eased slightly by a ramp-up in U.S. drilling installations last week, which reached the highest level in two years, as well as an Energy Department forecast showing domestic oil output will rise to just over 12 million barrels per day this year, an 850,000 increase, with nearly 13 million expected per day in 2023.
Brent crude futures contracts for May delivery, the global pricing benchmark, were last seen $5.65 lower on the session at $101.24 per barrel, a move that would mark a 22% pullback from the near $130 levels they reached early last week.
WTI futures for April, which are more closely tied to U.S. gasoline prices, fell $5.92 from Friday's close to change hands at $97.09 per barrel.
3. -- Tesla Raise Prices For Second Time In a Week As Musk Laments Inflation
Tesla (TSLA) shares edged lower in pre-market trading after the clean-energy carmaker raised prices on its best-selling models in the U.S. and China for the second time in a week.
U.S. prices for all of Tesla's cars were bumped higher overnight, with the Model 3 cost increasing by around $3,500. Price hikes in China, meanwhile, will see the Model 3 increase by a total of 28,000 yuan, or around $4,400, compared to a week ago.
Tesla CEO Elon Musk noted over the weekend that both his car company, as well as his space project SpaceX, were seeing significant price increases in raw materials and logistics as a result of the recent ramp in global commodity prices, which he linked to the ongoing war between Russia and Ukraine.
Tesla shares were marked 1% lower in pre-market trading to indicate an opening bell price of $759.10 each, a move that would extend the stock's two-month decline to around 37%.
4. -- Global Fund Managers See 2022 Bear Market, Flee Stocks
Global fund managers are expecting a bear market for stocks this year, according to a closely-tracked survey from Bank of America, as Russia's war on Ukraine, Fed tightening and soaring commodity prices sap investor sentiment.
BofA's monthly Fund Managers Survey showed global investors controlling more than half a trillion in collective assets are sitting on the largest cash piles in nearly two years as they pull out of risk markets and add to commodity-linked holdings. Allocations to global stocks, in fact, fell to the lowest levels since May of 2020 this month, the survey indicated.
Most of the investors polled, in fact, are predicting a bear market in stocks this year -- defined as a 20% decline from a recent high -- with global growth optimism at its lowest levels since the 2008 financial crisis. Liquidity conditions, the survey showed, have worsened to their lowest levels since the pandemic trough of April 2020.
5. -- Nickel Trading Resumes on the London Metal Exchange
The London Metal Exchange said Tuesday it will resume nickel trading nearly a week after cancelling all contracts amid a surge in prices linked to short-covering by China's Tsingshan Holding.
The LME said nickel trading will return 'as usual' on Wednesday March 16, at 8:00 am London time, following talks with both the Bank of England and Britain's Financial Conduct Authority watchdog, but with price limits set for the following day.
The move comes amid reports that Tsingshan Holding, run by billionaire investor Xiang Guangda, reached an agreement that would keep its existing short positions in place.
Those positions, in part, drove nickel prices to their all-time high of $100,000 per ton last week as traders -- eyeing developments in Nickel production linked to Russia's war on Ukraine and the sanctions that followed -- squeezed Tsingshan, also a nickel producer, during a dramatic 20 minute trading bloc that triggered the first close of the LME trading floor in thirty years.
