Pre-Market Primer: Why Investors Will be Watching Tesla, Merck, and Three Other Stocks Today

All three index futures are in the red in this morning’s pre-market as traders worry about a potential Brexit. While a Brexit wouldn’t be unexpected, it might cause a risk-off stance, especially given that the major indexes seem to be having trouble making new highs. Adding to the selling is the price action of crude futures, which are also in the red today for various reasons. In this article, we find out why five stocks, Tesla Motors Inc (NASDAQ:TSLA), Merck & Co., Inc. (NYSE:MRK), Continental Resources, Inc. (NYSE:CLR), Urban Outfitters, Inc. (NASDAQ:URBN), and H & R Block Inc (NYSE:HRB) are buzzing and see how elite funds are positioned in them.

Our research determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).

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Tesla Responds to Rumors

Tesla Motors Inc (NASDAQ:TSLA) is slightly lower in pre-market trading after Bloomberg reported that the U.S. National Highway Traffic Safety Administration is examining a potential suspension issue with Tesla’s Model S. The article said that the agency is asking for additional information from Tesla and from Model S owners. Tesla promptly responded that the article might not be true. In a blog post, the company said that, “there is no safety defect with the suspensions in either the Model S or Model X,” and that the “NHTSA has not opened any investigation nor has it even started a “preliminary evaluation,” which is the lowest form of formal investigatory work that it does.” 39 funds in our database were long Tesla Motors Inc (NASDAQ:TSLA) at the end of March.

Merck Buys a Biotech

Merck & Co., Inc. (NYSE:MRK) is in the spotlight after the healthcare giant bought Afferent Pharmaceuticals, a biotech developing treatments for a chronic cough and neurogenic conditions. Merck will pay $500 million up front for  the acquisition, with the potential for payments up to an additional $750 million for various milestones. Of the 766 active funds that we track, 70 funds owned $2.49 billion in Merck & Co., Inc. (NYSE:MRK) holdings on March 31, which accounted for 1.70% of the float.

On the next page we examine why investors are watching Continental Resources, Urban Outfitters, and H & R Block today