10 things you need to know before the opening bell

Here’s what you need to know before the second trading day of 2016 gets underway.

It was another wild day for China. China’s Shanghai Composite tumbled more than 3% at the open before racing to a 1% gain. Action whipsawed throughout the session and managed to make new lows in the final hour of trading. However, reported government intervention in the market trimmed the loss to 0.3% at the close. China’s yuan strengthened 0.2% at 6.5176 per dollar.

Tame inflation data is weighing on the euro. The Eurozone CPI Flash Estimate printed a 0.2% year-over-year increase in prices for December, a touch below the up 0.3% gain that was expected by the Bloomberg consensus. The core reading rose 0.9% over last year, shy of the 1% gain that economists were forecasting. Post-data selling has pushed the euro down 0.7% to 1.0755 where it hasn’t traded since the December 3 European Central Bank meeting.

David Cameron will let ministers campaign for a Brexit. British Prime Minister David Cameron says he won’t prevent ministers from his Conservative party from campaigning for the UK to leave the European Union through a referendum. Cameron has been outspoken against a so-called ‘Brexit,’ and has promised to get a better deal that would reform immigration. The British pound is weaker by 0.3% at 1.4673 and is at levels last seen in April.

Iran is being isolated further. Kuwait is the latest Middle Eastern nation to sever ties with Iran in response to the attack on Saudi Arabia’s embassy in Tehran. On Tuesday, Kuwait recalled its ambassador from Tehran, joining both Saudi Arabia and Bahrain to do so. The United Arab Emirates and Sudan are among others who have “downgraded” their relationship with Iran in response to the attack. West Texas Intermediate crude oil is up 0.2% at $36.82 per barrel.

The US is suing Volkswagen. The Justice Department is suing Volkswagen for its emissions cheating scandal that violated the Clean Air Act. Volkswagen rigged the engines of various models in hundreds of thousands of automobiles to evade tests that would determine if they were emitting too much nitrogen oxide. “The United States will pursue all appropriate remedies against Volkswagen to redress the violations of our nation’s clean air laws,” said Assistant Attorney General John Cruden, head of the departments environment and natural resources division, Reuters reported.

Smith & Wesson boosted its outlook. Gun maker Smith & Wesson raised its third quarter outlook due to unexpectedly strong sales. The company sees revenue of $175 million to $180 million for the quarter ended January 31, up from its previous estimate of $150 million to $155 million. In addition, the gun maker boosted its earnings per share outlook to $0.39 to $0.41 from $0.27 to $0.29. “The sell-through rate of its products at distribution has been stronger than originally anticipated, resulting in reduced distributor inventories of its firearms,” Smith & Wesson said in a press release.

GM and Lyft are forming an alliance. General Motors will invest $500 million in Lyft and the two companies will work together to form an on-demand network of autonomous vehicles. According to Reuters, the companies are a match as both believe autonomous vehicles will first reach the consumer as part of a ride-sharing service. No timeline has been set on the on-demand network, but in the meantime Lyft drivers will be able to lease GM cars on a short-term basis. Lyft says the new haul values the company at $5.5 billion.

Editas Medicine has filed for an IPO. The drugmaker backed by Bill Gates and Google has filed for a $100 million initial public offering. According to Bloomberg, the gene-editing company will use up to 20% of the proceeds for pre-clinical studies and clinical trials for its lead program on blindness. The company will trade under the ticker ‘EDIT.’

Stock markets around the world are mostly lower. Overnight, Australia’s ASX (-1.6%) was the laggard and in Europe, Germany’s DAX (-0.7%) paces the decline. S&P 500 futures are down 13.50 points at 1995.50.

US economic data is light. Auto and truck sales will be released throughout the day. The US 10-year yield is lower by 2 basis points at 2.22%.

NOW WATCH: Why Chinese executives keep disappearing

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.