Stocks set to extend losses ahead of Fed minutes
U.S. stock futures traded lower ahead of Wednesday’s Wall Street session, implying stocks will extend losses after all three major indices plunged in afternoon trading yesterday, pulled down the technology sector.
By 5:40 a.m. ET, futures tied to the blue-chip Dow edged 150 points, or 0.44% lower to 33,846. S&P 500 futures dropped 23.62 points, or 0.57% to 4,099.38 while the tech-heavy Nasdaq 100 futures gave away 135.62 points, or 1.03% to 13,076.38.
The U.S. Federal Reserve will release minutes from its latest monetary policy meeting at 2:00 p.m. today.
Bitcoin sinks below $40,000 on China ban
Meanwhile, bitcoin prices tanked below $40,000 for the first time since early February after China barred payment companies and financial institutions from offering services related to cryptocurrency transactions.
Chinese authorities also warned traders against speculative trading in cryptocurrencies.
The news pushed the price of Bitcoin from $45,600 to $39,240 early Wednesday, its lowest level in more than three months and well below the record high of $64,870 it reached last month.
Other cryptocurrencies also fell, with Ethereum dropping nearly 16% at $2,960.29. Dogecoin slipped 16% to $0.4189.
Crude falls on rising inventories and Covid-19 cases
In energy markets, crude futures were also trading this morning in the red as sources close to the American Petroleum Institute reported that U.S. crude stockpiles jumped by 620,000 barrels in the week ended May 14.
Rising coronavirus cases in Asia also spooked crude traders, with India reporting 4,529 coronavirus deaths in the past 24 hours.
At the time of writing, U.S. West Texas Intermediate (WTI) crude futures lost $1.09, or 1.66% to $64.41 a barrel. International Brent crude futures were at $67.59, down $1.12, or 1.63% a barrel.
Legendary ‘Big Short’ trader Michael Burry bets against Tesla
Tesla (NASDAQ: TSLA) shares slide in pre-market trading Wednesday after it was revealed in a regulatory SEC filing that Michael Burry, of “The Big Short” fame has placed a big bet against the electric automaker.
The filing shows that as of March 31, 2021, Burry’s Scion Asset Management holds put options on 800,100 Tesla shares, worth over $500 million.
A put option is a derivative contract that gives the holder the right, but not the obligation, to sell an underlying stock at a specified price on or before a specified date.
Burry made more than $700 million in profits betting against the market during the financial crisis of 2007-2008.
At the time of writing, Tesla stock was indicated $15.89, or 2.75% to $561.98 a share.
