Morning Brief: Global stock market sell-off continues

Monday, February 5, 2018

What to watch today

This past week’s trading showed that another year of low volatility does not appear to be in store for investors. Punctuated by Friday’s sell-off, the major averages lost over 3% this past week to begin February on a downbeat note. The selling on Friday was relentless as markets broke lower at the open and continued to slide throughout the day. When the dust settled, the Dow lost 2.5%, or 665 points, while the S&P 500 lost 2.1%, or 59 points, and the Nasdaq lost just under 2%, or 144 points. Meanwhile, Treasury yields continued their climb higher during the week with the 10-year hitting a four-year high of 2.85% after Friday’s jobs report. It was only back in the summer of 2016 that the 10-year hit a record low of 1.37%. On Monday, U.S. stock index futures continued to tumble ahead of the market open.

In the week ahead, earnings will continue to be the big market story with notable reporters including Tesla (TSLA), Disney (DIS), Nvidia (NVDA), General Motors (GM), Gilead (GILD), Chipotle (CMG), 21st Century Fox (FOXA), Viacom (VIAB), Yum Brands (YUM), Expedia (EXPE), and Philip Morris (PM) among dozens of other S&P 500 members. All told, 92 members of the S&P 500 are expected to report results this week.

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Top news

Apple Music on track to overtake Spotify: Apple Music is on the verge of overtaking Spotify AB in U.S. paid subscribers, a sign that the music-streaming world’s dominant force is facing growing competition ahead of its hotly anticipated public stock offering. Apple Inc.’s (AAPL) streaming-music service, introduced in June 2015, has been adding subscribers in the U.S. more rapidly than its older Swedish rival — a monthly growth rate of 5% versus 2% — according to source.  [The Wall Street Journal]

Wells Fargo rebuke puts bank boards in Fed’s crosshairs:  The Federal Reserve’s unprecedented move to handcuff growth at Wells Fargo & Co. (WFC) sent a message that boards of directors, not just management, will be held accountable when big banks fail to manage risks. The Fed on Friday said Wells Fargo would be replacing four board directors in 2018 and announced an enforcement action that limits the size of the third-largest U.S. bank by assets, potentially crimping revenue and profit growth. [The Wall Street Journal]

US consumer protection official puts Equifax probe on ice:  Mick Mulvaney, head of the Consumer Financial Protection Bureau, has pulled back from a full-scale probe of how Equifax Inc. (EFX) failed to protect the personal data of millions of consumers, according to people familiar with the matter. Equifax said in September that hackers stole personal data it had collected on some 143 million Americans. Richard Cordray, then the CFPB director, authorized an investigation that month. [Reuters]

Big banks bar people from buying bitcoin with a credit card: JPMorgan Chase (JPM), Bank of America (BAC) and Citigroup (C) said they are no longer allowing customers to buy cryptocurrencies using credit cards. The news came as bitcoin (BTC.USD) has more than halved in value from an all-time high above $19,000 hit in mid-December. [CNBC]

Immigration deal’s chances slip as Trump and Democrats dig in: Chances for an immigration deal in Congress are dimming as Republicans and Democrats pull further apart and President Donald Trump threatens to walk away from any agreement that doesn’t meet his demands. Senate Majority Leader Mitch McConnell has said he’ll allow floor debate and votes on immigration legislation if Democrats vote to fund the government and refrain from the kind of confrontation that led to a three-day shutdown last month. [Bloomberg]

For more of the latest news, go to Yahoo Finance

Yahoo Finance is holding a live summit on cryptocurrencies, featuring a range of big-name guest speakers, on Feb. 7 in New York City. Get your ticket here.

Philadelphia Eagles’ Nick Foles celebrates winning Super Bowl LII with the Vince Lombardi Trophy. REUTERS/Chris Wattie

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