US OPEN: Bearish opening of Monday’s session on Wall Street, Spirit Airlines surges, Boeing likely to end strike

• Wall Street opens lower on Monday.
• Spirit Airlines Inc. announced an extension of its credit card processing agreement with the U.S. Bank National Association.
• Cigna Group and Humana Inc. have revived merger discussions.
• Boeing Co. gains following news of a tentative agreement with its machinists union that could end a costly five-week strike.

US equities are set for a mixed open, with the Russell 2000 remaining flat, S&P 500 being 0.1% lower and Nasdaq 100 leading losses with 0.2% decline. 

In Europe, most indexes are red. British UK100 and Spanish SPA35 are the best performing, losing only 0.17% and 0.27% respectively. French CAC40 and German DAX 40 are losing 0.55% with Polish W20 being the worst performing index, down 0.95% today.

Boeing Co. gains following news of a tentative agreement with its machinists union that could end a costly five-week strike. Spirit Airlines Inc. shares skyrocketed after the budget carrier announced an extension of its credit card processing agreement with the U.S. Bank National Association. Cigna Group and Humana Inc. are making headlines as Bloomberg News reported that the two health insurers have revived merger discussions.

Current volatility observed on Wall Street. Source: xStation 

The Nasdaq-100 index, represented by the US100 contract, is trading above the support at the 78.6% Fibonacci retracement for 9th consecutive trading day. For upward momentum to continue, the resistance at 20638 must be broken. It is the level of weekly close all-time-high and has acted as strong resistance last week. The key level for bears to gain momentum would first be 78.6% Fibonacci retracement, followed by mid-August highs at 19,917.81.The index has been in an uptrend since late July, forming higher highs and higher lows, but is now facing resistance near weekly high. Both 78.6% Fibo and mid-August highs act as strong support. A break of these levels could quickly bring the 100-day and 50-day SMAs into play.

Currently, the RSI is slowly showing bearish divergence, lower highs and lows. The MACD remains tight and suggests potential for high volatility also being more bearish. Additionally, the 50-day SMA has crossed the 100-day SMA with bullish crossover, showing bullish momentum. Source: xStation 5

News:

• Boeing Co. (BA.US) shares surged 3.2% to $160 following news of a tentative agreement with its machinists union that could end a costly five-week strike. The proposal includes a 35% wage increase over four years, a reinstated incentive plan, and increased company 401(k) fund matching. While the offer doesn't restore pensions, it includes $7,000 in ratification bonuses and maintains annual bonuses. The union will vote on the new contract on Wednesday. Additionally, Boeing is exploring asset sales to boost its finances, according to a Wall Street Journal report, and has announced a window for up to $25 billion in stock and debt offerings over the next three years.
• Spirit Airlines Inc. (SAVE.US) shares skyrocketed by more than 37% in after the budget carrier announced an extension of its credit card processing agreement with U.S. Bank National Association. The new deal extends a debt refinancing deadline by two months to December 23, 2024. Spirit must either extend or refinance its 2025 bonds by that time to maintain the agreement. The airline also disclosed that it had fully drawn down its $300 million revolving credit facility and expects to end the year with over $1 billion in liquidity. This news comes as a relief to investors, as Spirit's stock has lost more than 91% of its value this year amid concerns about potential bankruptcy.
• Cigna Group (CI.US) and Humana Inc. (HUM.US) are making headlines as Bloomberg News reported that the two health insurers have revived merger discussions. Cigna, valued at about $94 billion, has reportedly held informal, early-stage talks with Humana, which has a market capitalization of around $32 billion. This development comes after previous merger attempts were abandoned late last year due to disagreements on price. In after-hours trading, Humana shares rose about 1%, while Cigna's stock dropped approximately 2%. The potential deal faces several hurdles, including antitrust scrutiny and Cigna's ongoing process of selling its Medicare Advantage business. Neither company has made an official decision, and they may opt to delay or abandon the merger talks altogether.
• Alaska Air Group Inc. (ALK.US) expects performance to be "on the better end of our previously guided EPS range," bolstered by its recent acquisition of Hawaiian Holdings. Alaska Air anticipates achieving the industry's best adjusted pre-tax margin performance for the quarter, both for its legacy operations and on a combined basis with Hawaiian. The company attributes this strong showing to robust Alaska results, citing positive revenue and cost performance. Notably, the favorable revenue trends observed in Q3 are continuing into the fourth quarter, with strong advanced booking performance across both Alaska and Hawaiian networks. In a significant financial move. The airline plans to report its full Q3 2024 earnings and provide Q4 guidance, including supplemental information, on October 31, though it does not intend to hold a Q3 earnings call.

Other news coming from individual S&P 500 index companies. Source: Bloomberg Financial LP