Stock Market Update

The S&P 500 futures are down 70 points and are trading 1.2% below fair value, the Nasdaq 100 futures are down 282 points and are trading 1.4% below fair value, and the Dow Jones Industrial Average futures are down 450 points and are trading 1.1% below fair value.

Early trading features a negative bias. Contracts tied to the S&P 500, Nasdaq 100, and Dow industrials are lower after Friday's higher finish in major indices.

Treasury yields are also lower, reflecting some safe-haven trading after President Trump hinted at the possibility of a recession in a Fox News interview, saying there will be a "period of transition" for the US economy. 

The 10-yr yield is down eight basis points to 4.24%. The 2-yr yield is down five basis points to 3.95%. 

There is no US economic data of note today.

In corporate news:

• DoorDash (DASH 183.00, +4.92, +2.8%), TKO Group (TKO 147.49, +3.76, +2.6%), Williams-Sonoma (WSM 191.70, +3.29, +1.8%%) and Expand Energy (EXE 98.03, +2.00, +2.1%): will replace Borgwarner (BWA), Teleflex (TFX), Celanese (CE) and FMC Corp. (FMC) in the S&P 500 respectively, effective prior to the open of trading on Monday, March 24
• Redfin (RDFN 10.20, +4.40, +75.9%): Rocket Companies (RKT) enters into agreement to acquire Redfin in all-stock transaction for $12.50 per Redfin share
• Tesla (TSLA 255.40, -7.27, -2.7%): sales struggling in China, according to Bloomberg
• Robinhood Markets (HOOD 41.80, -2.62, -6.0%): ordered to pay $29.75 mln in fines for violating numerous FINRA rules

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the week on a mixed note. Japan's Nikkei: +0.4%, Hong Kong's Hang Seng: -1.9%, China's Shanghai Composite: -0.2%, India's Sensex: -0.3%, South Korea's Kospi: +0.3%, Australia's ASX All Ordinaries: +0.2%.
  • In economic data:
    • China's February CPI -0.2% m/m (expected -0.1%; last 0.7%); -0.7% yr/yr (expected -0.4%; last 0.5%). February PPI -2.2% yr/yr (expected -2.0%; last -2.3%)
    • Japan's January Overall Wage Income 2.8% yr/yr (expected 3.2%; last 4.4%). January Current Account surplus JPY1.94 trln (expected surplus of JPY1.97 trln; last surplus of JPY2.73 trln). January Leading Index 108.0 (expected 108.1; last 107.9) and Coincident Indicator 0.1% m/m (last 1.0%). February Economy Watchers Current Index 45.6 (expected 48.5; last 48.6)
  • In news:
    • China's retaliatory tariffs on U.S. agricultural products went into effect today and China's Ministry of Commerce announced that tariffs will also be imposed on some imports from Canada.
    • There was growing speculation that the Bank of Japan will refrain from a rate hike in March as it observes the impact of the January hike.
    • Australia's Prime Minister Albanese announced that national elections will be held in May.
• Major European indices trade in the red. STOXX Europe 600: -0.7%, Germany's DAX: -1.0%, U.K.'s FTSE 100: -0.4%, France's CAC 40: -0.5%, Italy's FTSE MIB: -0.4%, Spain's IBEX 35: -1.0%.
  • In economic data:
    
    • Eurozone's March Sentix Investor Confidence -2.9 (expected -9.1; last -12.7)
    • Germany's January trade surplus EUR16.0 bln (expected surplus of EUR21.0 bln; last surplus of EUR20.7 bln). January Imports 1.2% m/m (last 1.6%) and Exports -2.5% m/m (last 2.5%). January Industrial Production 2.0% m/m (expected 1.6%; last -1.5%); -1.5% yr/yr (last -2.3%)
    • Italy's January PPI 1.6% m/m (last 0.6%); 4.4% yr/yr (last 1.1%)
    • Swiss February SECO Consumer Climate -34 (expected -28; last -21)
  • In news:
    • Germany's CDU and SPD are moving closer to forming a ruling coalition.
    • There is some speculation that the European Central Bank will pause its cutting campaign after policymaker Schnabel expressed some concerns about inflation.