Dow Futures Edge Lower On Pullback Fears: PLTR, SRPT, TSLA, AMD Among Stocks To Watch

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While Dow Jones futures were down by 0.72% at the time of writing, the S&P 500 futures fell 1.02%.

  • Michael Burry’s hedge fund disclosed a short position in Palantir and Nvidia at the end of the third quarter.
  • Goldman Sachs and Morgan Stanley CEOs warned of the possibility of a 10-15% drawdown in equities.
  • Asian markets ended Tuesday’s trading session on a negative note, with the KOSPI declining the most at 2.43%.

U.S. stocks appear set for a negative opening on Tuesday as investors exercised caution following a warning of a pullback from Goldman Sachs and Morgan Stanley analysts, as well as hedge fund manager Michael Burry.

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According to a 13F filing with the U.S. Securities and Exchange Commission (SEC), Burry’s hedge fund, Scion Asset Management, held a short position in Palantir Technologies Inc. (PLTR) worth $912 million and $186.58 million in Nvidia Corp. (NVDA) at the end of the third quarter (Q3).

Separately, Goldman Sachs CEO David Solomon warned of a pullback at an investment summit in Hong Kong, according to a CNBC report. “It’s likely there’ll be a 10 to 20% drawdown in equity markets sometime in the next 12 to 24 months,” he said.

At the same event, Morgan Stanley CEO Ted Pick also warned of the possibility of a 10% to 15% drawdown, according to the report.

Futures Trade Lower

While Dow Jones futures were down by 0.72% at the time of writing, the S&P 500 futures fell 1.02%, while the tech-heavy Nasdaq 100’s futures declined 1.33%. Futures of the Russell 2000 index fell 1.38%.

Meanwhile, the SPDR S&P 500 ETF (SPY) was down by 1% at the time of writing, Invesco QQQ Trust (QQQ) fell 1.31% on Tuesday morning, and SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 0.72%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘extremely bearish’ territory.

Asian Markets Negative

Asian markets ended Tuesday’s trading session on a negative note, with the KOSPI declining the most at 2.43%, followed by the Nikkei 225 at 1.07%, and the TWSE Capitalization Weighted Stock index at 0.78%.

The Hang Seng index closed 0.73% lower, while the Shanghai Composite declined 0.41%.

Stocks To Watch

  • Palantir Technologies Inc. (PLTR): Palantir’s Q3 earnings surpassed Wall Street expectations, with the company reporting earnings per share (EPS) of $0.21 on revenue of $1.18 billion, compared to analyst estimates of an EPS of $0.17 on revenue of $1.09 billion, according to Stocktwits data. However, Palantir shares were down nearly 7% pre-market.
  • Sarepta Therapeutics Inc. (SRPT): Sarepta shares were down nearly 40% pre-market on Tuesday after the company reported failure in the latest trial of its two muscular dystrophy drugs.
  • Tesla Inc. (TSLA): Norway’s sovereign wealth fund, Norges Bank Investment Management, rejected Tesla CEO Elon Musk’s $1 trillion pay package over concerns about the size of the award and the lack of mitigation of key person risk. Tesla shares were down more than 2% pre-market. The company’s China-made electric vehicle sales fell 9.9% year-on-year to 61,497 units in October, according to data from the China Passenger Car Association (CPCA), as reported by CnEVPost.
  • Advanced Micro Devices Inc. (AMD), Super Micro Computer Inc. (SMCI), and Pfizer Inc. (PFE) are among the companies scheduled to report their latest quarterly earnings on Tuesday.

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