Equity futures are down roughly 1%, pushing S&P futures to the low end of its bull channel. Today’s price action will be incredibly important, technically speaking. If prices close below the bull channel, we could see further declines in the week ahead. Most of this price action is a result of a dismal jobs report from Friday, which only saw 120,000 new jobs created in March – about half of what economists were expecting. In addition, earnings reports begin this week, starting with Alcoa (AA) tomorrow afternoon.
Overseas, European markets were closed for Easter Monday, while Asian markets were down. China reported that CPI rose 3.6% in March, up from 3.2% in February. China has been outspoken that it could further tighten monetary policy in the wake of rising inflation – a negative for the overall global growth story.
As is typically the correlation, we should see the CBOE Volatility Index (VIX) spike when it opens this morning. VXX, an ETF that follows VIX short-term futures, is indicated 5.2% higher in premarket trade.
Commodities are mixed in early trade. Oil is off over 1.5%. Reports overnight suggest that Iran may reenter talks over its nuclear program, helping to ease angst over a supply disruption. Gold futures are 0.8% higher to near $1,650 per ounce.
Other News and Notes:
– AOL shares are up nearly 32% after announcing a plan to sell $1.1 billion in patents to Microsoft (MSFT). MSFT shares are lower by 0.9%
– Sony (SNE) will cut 6% of its workforce
– Needham & Company starts LinkedIn (LKND) at a hold. LKND shares look to open down 0.5% at $98.80
– The analyst who put a $1,000 price target on Qualcom (QCOM) has downgraded Apple (AAPL) to neutral from buy. AAPL shares down 1% to $626.84
– Avon (AVP) appointed a new CEO, perhaps in a bid to have someone to negotiate with Coty products over its proposed takeover. AVP is down 1.8% to $23.00