Here are five things you must know for Monday, October 18:
1. -- Stocks Futures Slip Ahead of Busy Earnings Week, Oil Surge
U.S. equity futures slipped lower Monday, while oil prices extended their near-term rally into a ninth consecutive week, as concerns over surging inflation pressures and the weakest China growth rate in more than a year tamed optimism linked to a strong start to the third quarter earnings season.
China posted its weakest growth rate in more than a year overnight as a rolling power crisis, supply chain disruptions and a crackdown on the tech sector combined to slow third quarter GDP to just 4.9%, the weakest since the pandemic trough of 2020.
Concerns over faster inflation, fueled in part by surging power prices, triggered both a warning on interest rates from the Bank of England and a pullback in regional markets, with the Stoxx 600 falling 0.4% in early trading.
On Wall Street, earnings will take center-stage again this week with around 78 S&P 500 companies reporting September-quarter profits, including tech heavyweights Tesla (TSLA) - Get Tesla Inc Report, Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report, IBM (IBM) - Get International Business Machines (IBM) Report and Intel (INTC) - Get Intel Corporation (INTC) Report along with Johnson & Johnson (JNJ) - Get Johnson & Johnson (JNJ) Report, AT&T T and Procter & Gamble PG.
Last week's stronger-than-expected bank earnings have lifted collective profit forecasts for the S&P 500, with analysts now looking for third quarter earnings to rise 32% from last year to $421.4 billion.
Futures contracts tied to the Dow Jones Industrial Average are indicating a 105 point opening bell dip while those tied to the S&P 500, coming off its best week since July, are priced for a 17 point retreat. Nasdaq Composite futures, meanwhile, are set for an 80 point slide as benchmark 10-year note yields rose to 1.612% in overnight trading.
2. -- China GDP Slows Amid Power Crisis, Beijing Corporate Crackdown
Property sector woes, supply chain disruptions, a power crisis and a government crackdown on the country's biggest and most profitable businesses combined to weaken China's economic growth to the slowest pace in year last quarter, official data indicated Monday.
China, the world's second-largest economy, posted a third quarter GDP growth rate of 4.9%, well below analysts' forecasts of a 5.2% advance and the slowest pace of growth since the pandemic trough of 2020.
Tougher emissions standards, as well as a reported supply shortage, have lifted coal prices to an all-time high, triggering both a surge in substitute energy prices and the ongoing power crisis, which is limiting industrial output as factories are forced to close and shop floors go dark.
Beijing's crackdown on the tech sector, as well as indebted property giant Evergrande's teetering on the edge of bankruptcy, also added to the sharp third quarter slowdown.
3. -- Apple's 'Unleashed' Event To Feature M1-Powered MacBook
Apple (AAPL) - Get Apple Inc. (AAPL) Report shares edged lower Monday ahead of the tech giant's second major launch event of the autumn, where it is expected to unveil the first redesign of its MacBook Pro laptop in at least five years.
Apple's 'Unleashed' launch event, slated for 10:00 am Pacific Time in Cupertino, California, will likely focus on the newly-designed laptops and the chips that run them, although this time they will not be made by Apple's long-time supplier Intel INTC but by Apple itself - the M1.
Apple shares were marked 0.4% lower in pre-market trading Monday to indicate an opening bell price of $144.23 each.
4. -- Biogen Sees Mixed Results From ALS Drug Trial
Biogen (BIIB) - Get Biogen Inc. Report shares moved lower Monday after the drugmaker said late-stage tests of its experimental treatment of certain forms of Lou Gehrig's disease for failed to meet expectations.
Biogen said the late-stage trial of tofersen, used to treat patients with amyotrophic lateral sclerosis, better-known as ALS, show some improvement in patient outcomes, but the overall results weren't 'statistically significant' and failed to meet the study's primary endpoint. ALS is a progressive neurodegenerative disease that is uniformly fatal with an average survival of three to five years.
"The wait for new options has been long and difficult for the ALS community, and we welcome this important research advancement in this difficult to treat disease space,” said Biogen's head of R&D Alfred Sandrock.
Biogen shares were marked 1.13% lower in pre-market trading Monday to indicate an opening bell price of $278.00 each.
5. -- Gottlieb Calls For Urgent 'Delta Plus' Study
Dr. Scott Gottlieb, the former head of the U.S. Food & Drug Administration, has called for "urgent research" into the nature of a Delta-variant outbreak in the United Kingdom that could suggest a new strain of the deadly virus.
Britain has seen COVID cases surge over the past few weeks, with 45,140 new infections reported on Sunday, the highest since July, with researchers suggesting it could be linked to a mutation of the Delta variant now known as "Delta-plus"
"UK reported its biggest one-day Covid case increase in 3 months just as the new delta variant AY.4 with the S:Y145H mutation in the spike reaches 8% of UK sequenced cases," Gottlieb said on his verified Twitter account. "We need urgent research to figure out if this delta plus is more transmissible, has partial immune evasion?"