Here are five things you must know for Wednesday, December 1:
1. -- Stock Futures Rebound As Growth Bets Offset Omicron Concerns
U.S. equity futures rebounded firmly Wednesday, while Treasury bond yields held yesterday's gains and oil prices rallied ahead of this week's meeting of OPEC leaders, as investors continue to work through the impact of a suddenly-hawkish Federal Reserve and the uncertainty linked to the Omicron variant.
Fed Chair Jerome Powell's comments to the Senate Banking Committee yesterday shocked a market that was already unnerved by concerns that current vaccine structures may lose their efficacy against Omicron, sending Treasury yields higher and stocks sharply lower in heavy trading volumes.
Powell's suggestion that the Fed could 'wrap up' the process of tapering bond purchases 'a few months early' is also accelerating bets on mid-2022 rate hikes, with the CME Group's FedWatch tool now pricing in a 77% chance of a July move.
Still, with reports of easing supply chain bottlenecks from top-tier companies such as Walmart WMT and Volkswagen, as well as an improving economic picture from the Atlanta Fed's GDPNow forecasting tool, stocks look set to start the month of December -- a traditionally strong one for equities -- with solid opening bell gains.
Futures contracts tied to the Dow Jones Industrial Average are indicating a 345 point opening bell boost while those linked to the S&P 500 are priced for a 57 point advance. Futures tied to the tech-focused Nasdaq Composite are indicating a 245 point surge at the start of trading as benchmark 10-year Treasury note yields hold at 1.492%, in overnight trading.
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2. -- U.S. Tightens Travel Restrictions As Omicron Cases Spread
The State Department tightened restrictions on travelers entering the United States late Tuesday as more countries around the world tweak regulations in order to tame the spread of the newly-discovered Omicron variant.
Taking advice from the Centers for Disease Control and Prevention, travelers seeking to enter the U.S. must show a negative Covid test taken within the last day, compared to the previous three-day window. The CDC has also drawn a list of 80 countries deemed 'Level Four' risks for U.S. travelers, and discourages visits by American citizens.
In global terms, some 60 countries have imposed new or tighter travel and border restrictions since Omicron was identified last week, with cases now confirmed in at least a dozen different nations, including Japan, Australia, Great Britain, Spain and Sweden.
3. -- Salesforce Shares Slump After Q4 Earnings Forecast, co-CEO Appointment
Salesforce (CRM) - Get Free Report shares slumped lower in pre-market trading after the group forecast softer current quarter profits amid intensifying competition in the cloud and business software market.
The forecast muddied an otherwise solid third quarter earnings report, which showed revenues rising 27% to $6.86 billion over the three months ending in October, helping deliver an adjusted bottom line of $1.27 per share.
However, Salesforce said fourth quarter profits would slow to between 72 cents and 73 cents per share, notably shy of Street forecasts, with analysts noted growing market share gains for rivals such as Google (GOOGL) - Get Free Report and Microsoft (MSFT) - Get Free Report.
Salesforce also unveiled plans to promote chief product officer Bret Taylor to the role of co-CEO alongside founder Marc Benioff.
Salesforce shares were marked 6.5% lower in pre-market trading to indicate an opening bell price of $266.50 each.
4. -- Merck Gets FDA Panel Nod For Covid Pill Treatment
Merck & Co. (MRK) - Get Free Report shares powered higher in pre-market trading after an advisory pane to the U.S. Food & Drug Administration recommended the authorization of its Covid antiviral treatment.
In a narrow 13-10 decision, the FDA's Antimicrobial Drugs Advisory Committee voted to approve Merck's oral therapy, known as 'molnupiravir', for use it at-risk patients. The FDA will evaluate the panel's recommendation and likely make its full decision later this week.
"We are one step closer to being able to add molnupiravir to the tools that we have – in addition to vaccines – that can be available and accessible to help fight COVID-19,' said CEO Wendy Holman of Ridgeback Biotherapeutics, who helped develop the molnupiravir treatment alongside Merck. "Importantly, our data show activity against the most prevalent variants today, and molnupiravir was studied as a monotherapy with no drug-drug interactions observed to date."
Merck shares were marked 6.1% higher in pre-market trading to indicate an opening bell price of $79.45 each.
5. -- Cathie Woods's ARK Funds Add Twitter Shares Following Dorsey Departure
Twitter (TWTR) - Get Free Report shares bumped higher in pre-market trading as updates from Cathie Wood's ARK Investment Management (ARKK) - Get Free Report group noted the famed tech investor added to her position in the group following the resignation of CEO Jack Dorsey.
Wood and ARK added 1.1 million shares of the micro-blogging website to the group's portfolio late Tuesday, based on a closing price of $43.94 each. Twitter shares, in fact, were trading at a 52-week low yesterday following Dorsey's departure -- and the naming of Parag Agrawal as new CEO -- on Monday following pressure late last year from activists investors at Elliott Management and Silver Lake.
"I've decided to leave Twitter because I believe the company is ready to move on from its founders," Dorsey said. "My trust in Parag as Twitter's CEO is deep. His work over the past 10 years has been transformational. I'm deeply grateful for his skill, heart, and soul. It's his time to lead."
"I want you to know that this was my decision and I own it," he added in a statement posted on his verified Twitter account.
Twitter shares were marked 2.2% higher in pre-market trading to indicate an opening bell price of $44.90 each.