What's moving markets today: May 20,2019

By CNN Business

Updated 6:58 p.m. ET, May 20, 2019
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6:53 a.m. ET, May 20, 2019

Tesla is 'facing a quagmire,' analyst warns

From CNN Business' Jordan Valinsky

Tesla (TSLA) shares are sinking more than 4% in premarket trading after Wedbush Securities analyst Daniel Ives warned that he has "major concerns" about CEO Elon Musk and the company.

Here's what Ives said in a new note:

We continue to have major concerns around the trajectory of Tesla's growth prospects and underlying demand on Model 3 in the US over the coming quarters which is putting more heat in the kitchen on Musk & Tesla to rein in expenses at an accelerated rate with profitability targets in [the second half of 2019] a Kilimanjaro-like uphill climb, in our opinion.

He said that Tesla is "facing a quagmire" because it's doing several things at once, such as building a new factory in China, developing the next Model Y and continuing to ramp up production of the Model 3, all while "facing a growing cash crunch and high expense structure issue."

He lowered the stock's price target from $275 per share to $230 because of "reduced confidence in the company's ability to hit its 2019 unit demand guidance."

Tesla closed at $211.03 per share on Friday. The stock is down 37% for the year.

6:24 a.m. ET, May 20, 2019

Google dumps Huawei

From CNN Business' Julia Horowitz

Google (GOOG) is cutting back on its business with Huawei following an order from the Trump administration barring American companies from selling to the Chinese tech firm without a US government license.

Huawei relies on Google's Android operating system for its devices, as well as the Google Play app store.

We are complying with the order and reviewing the implications," a Google spokesperson said Monday.

The restrictions deal a huge blow to Huawei's ambitions to overtake Samsung (SSNLF) as the world's biggest smartphone maker. Huawei phones are much less attractive outside China without Google services, according to analysts.

The news is likely to feed investor unease about the US-China trade war as negotiations between Washington and Beijing appear to stall.

Traders will continue to keep a close eye on the yuan, which was little changed Monday. 

The currency's steep slide against the dollar in recent weeks could complicate talks further.

6:28 a.m. ET, May 20, 2019

Checking in on global markets

From CNN Business' Julia Horowitz

US stock futures point slightly lower after concluding last week on a disappointing note.

The Dow closed down 0.4% on Friday. The S&P 500 fell 0.6%, and the Nasdaq lost 1%.

  • 🌍This morning, the Dow is set to fall more than 30 points when US markets open, or 0.1%. The S&P 500 is on track for a similar percentage drop, while the Nasdaq could shed 0.5%.
  • 🌍European markets opened lower. Britain's FTSE 100 index dipped about 0.4%. France's CAC 40 index fell 0.9%, while Germany's DAX index dropped 0.6% in early trading. Trade anxiety continues to weigh on stocks globally. 
  • 🌏That follows a mixed trading session in Asia, where Hong Kong's Hang Seng index dropped 0.6% and the Shanghai Composite index shed 0.4%. Meanwhile, Japan's Nikkei index climbed 0.2%.
  • 🇮🇳Stocks in India jumped more than 3.8% after exit polls indicated that incumbent Prime Minister Narendra Modi could be on track for a second term.
6:23 a.m. ET, May 20, 2019

Federal Reserve chair Jerome Powell gives keynote speech

From CNN Business' Julia Horowitz

Federal Reserve chair Jerome Powell will give the keynote speech at the Atlanta Fed's Financial Markets Conference on Monday at 7 p.m. ET.

Investors will listen for clues that Powell could change his sit-tight approach to interest rates now that the trade fight with China is back in full swing.

Powell said at the beginning of the month that board members didn't see a "strong case" for either raising or lowering interest rates. But that was before new rounds of tit-for-tat tariffs from Washington and Beijing.

The Trump administration has also said it's preparing further tariffs on Chinese goods worth $300 billion, which would put duties on essentially all of the country's exports to the United States.