Dow futures bounce by 200 points as markets look to rebound from Thursday's sell-off

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CNBC 09 July, 2021 - 06:42am 23 views

Why has the stock market dropped?

The major U.S. stock indexes fell Thursday on concerns about the global economic comeback from Covid-19. The losses came as Japan declared a state of emergency in Tokyo for the upcoming Olympics and as countries deal with a rebound in cases due to Covid variants. CNBCDow drops more than 250 points amid global economic recovery concerns, S&P 500 slides

Stock futures were mostly higher in early morning trading Friday a day after the major indexes fell amid concerns of a slowdown in global economic growth.

Futures on the Dow Jones Industrial Average rose 200 points, or 0.6%. S&P 500 futures bounced by 0.3%. Nasdaq-100 futures were slightly lower.

The yield on the 10-year Treasury rebounded 5 basis points to 1.34%, easing concerns about an economic slowdown (1 basis point is 0.01%). Falling yields have mystified investors lately, with the 10-year yield falling to 1.25% at its low on Thursday.

The stocks that led the losses on Thursday led the gains in premarket trading Friday. Bank of America jumped nearly 2% in early trading, leading a bounce in financial shares. Royal Caribbean and Carnival each popped more than 2%. American Airlines and United Airlines gained more than 1%.

Shares of GM gained 2% after Wedbush said the stock is a buy and could jump more than 50% as investors realize the extent of its tech and electric vehicle evolution.

Thursday's losses came as the proliferation of the highly infectious delta Covid variant also fueled worries about the global economic comeback. The Olympics announced a ban of spectators at Tokyo's summer games as Japan declared a state of emergency to curb the spread of coronavirus.

"Our central case has been for a choppy July" with the S&P 500 falling as low as 4,100, wrote Tom Lee, Fundstrat's head of research, in a note to clients Thursday night. "While this is a possibility, we think there is a chance [Thursday] marked the peak of [the] 'growth scare' and if this is correct, equities might be shifting towards a broader risk on."

The Dow closed Thursday's regular session lower by 259.86 points, or 0.75%, to 34,421.93. The S&P 500 dipped 0.86% to 4,320.82, while the Nasdaq broke a four-day win streak by falling 0.72% to 14,559.79.

For the week, the Dow is down 1.1%, the S&P 500 is off by 0.7% and the Nasdaq Composite has shed 0.5%.

Shares of companies tied to the economic comeback weighed on the market Thursday. Major cruise line, airline and home improvement stocks slumped. Chip stocks also dropped and Big Tech names retreated after gaining in previous sessions.

"[T]he market continues to contemplate what to do after growth peaks and the Fed turns off the spigot (neither of which have necessarily happened yet) and ahead of a 2Q21 earnings season that starts next Tuesday," Goldman Sachs' Chris Hussey said in a note Thursday.

The latest jobless claims report released Thursday also indicated a potential slowdown in the labor sector as first-time applicants for unemployment benefits unexpectedly jumped to 373,000 in the week ending July 3. Economists were looking to see 350,000 initial claims, according to Dow Jones.

Big Tech stocks were a bit weak in premarket trading as President Biden was set to announce a new executive order aimed at the competitive practices by the sector's giants. Amazon was down about 0.3% after hitting a new all-time high on Thursday.

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Dow futures tumble in stock selloff, yields slide

Fox Business 09 July, 2021 - 06:12am

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SlateStone Wealth chief market strategist Kenny Polcari and Seaport Securities President Teddy Weisberg discuss the state of the markets. 

Investors are bracing for a rocky session Thursday with U.S. stock futures down more than 1% as concerns mount over mixed economic data and an uptick of COVID-19 variants in Europe and Asia, and ahead of weekly jobless claims. 

Equities are falling in tandem with the 10-year Treasury yield, which traded as low as 1.258%, the lowest since Feb. 18. 

At 8:30 am ET, weekly jobless claims data will be released. The number of people filing for first-time jobless benefits is expected to fall to 350,000, from last week’s pandemic low of 364,000. Continuing claims, which track the total number of unemployed workers collecting benefits, are anticipated to drop to 3.335 million, which would mark a new pandemic low.

On Wednesday, the minutes from the Federal Reserve's June meeting showed the central bank has been caught off guard by the recent rise in inflation. However, while members expect inflation to climb above 2% in the near term, they still believe the gains are temporary. 

This boosted stocks as the Dow Jones Industrial Average rose 104 points, or 0.3%, while the S&P 500 and the Nasdaq Composite advanced 0.34% and 0.01%, respectively. Both the S&P 500 and the Nasdaq finished in record territory. 

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Dow, S&P 500 and Nasdaq log worst day in 3 weeks amid unrelenting slump in Treasury yields

MarketWatch 09 July, 2021 - 06:12am

The relationship between high-flying technology stocks and Treasury yields has broken down, echoing ‘the extreme anomalies of the dot-com boom when tech valuations became unmoored,’ according to Morgan Stanley.

US Stock Futures Ease Lower as Investors Digest Dovish Fed Minutes Ahead of Thursday’s Initial Claims Report

Yahoo Finance 09 July, 2021 - 06:12am

Looking ahead to Thursday’s session, investors will pore over the Labor Department’s latest jobless claims figures. The weekly update offers Wall Street regular insight into the pace of layoffs in the U.S. economy, which has been declining amid the COVID-19 vaccine rollout.

Economists expect to see 350,000 first-time applicants for unemployment benefits for the week ended July 3, according to Dow Jones.

At 04:11 GMT, September E-mini S&P 500 Index futures are trading 4341.00, down 8.75 or -0.20%. September E-mini Dow Jones Industrial Average futures are at 34483, down 85 or -0.25% and September E-mini NASDAQ-100 Index futures are at 14784.25, down 18.00 or -0.12%.

U.S. stocks ended higher on Wednesday and the S&P 500 and NASDAQ notched record closing highs after minutes from the last Federal Reserve meeting indicated officials may not be ready yet to move on tightening policy.

According to the minutes of the U.S. central bank’s June policy meeting, Fed officials felt substantial further progress on the economic recovery “was generally seen as not having yet been met,” but agreed they should be poised to act if inflation or other risks materialized.

Treasury yields edged lower following the Fed minutes, while stocks mostly edged higher. The minutes reflected a divided Fed wrestling with new inflation risks but still relatively high unemployment.

After its meeting and statement on June 16, investors began to anticipate the Fed would move more quickly to tighten than previously expected.

Wall Street has been concerned about inflation, with investors moving between economy-linked value stocks and growth names in the past few sessions, Reuters said.

China’s market regulator said on Wednesday it has fined a number of internet companies including Didi Chuxing, Tencent and Alibaba for failing to report earlier merger and acquisition deals for approval, according to a statement on the website of the State Administration of Market Regulation (SAMR).

The regulator fined the companies 500,000 Yuan each case, for not seeking approval in 22 deals, citing the country’s anti-monopoly laws.

Ride-hailing giant Didi, still fresh on the heels of its IPO on the New York Stock Exchange, has seen its shares plunge as China launched investigations on national security grounds and removed its App from app stores.

This article was originally posted on FX Empire

                         Today’s Market Wrap Up and a Glimpse Into Thursday                 

                         Silver Price Prediction – Prices Form Doji Day on Indecision                 

                         E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – 34381 Pivot Sets Early Tone on Thursday                 

                         Oil Price Fundamental Daily Forecast – Lack of Clarity from OPEC+ Caps Gains, API Draw Underpinning Prices                 

                         XAG/USD Price Analysis: Silver Remains In A Neutral Zone                 

                         European Equities: German Trade Data, the ECB Minutes, and U.S Jobless Claims in Focus                 

Biden's trip Wednesday to Crystal Lake, Ill., is just the latest of his visits to swing-vote areas in a bid to help his agenda and Democrats before the 2022 midterm election.

The former president said he’s seeking “potentially trillions of dollars” in damages.

The 147 Republicans who voted to overturn the presidential election and fueled the insurrection are all celebrating their love of America now.

Many banks should be able to beat analysts' estimates, although topping first-quarter earnings results could be difficult.

Wall Street lost ground on Thursday, with the S&P 500 and the Nasdaq pulling back from record closing highs in a broad sell-off driven by uncertainties surrounding the pace of the U.S. economic recovery. As the bond market rallied on a flight to safety, all three major U.S. stock indexes tumbled. "We're still effectively at all-time highs, so I wouldn’t read much into today's market action," said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York.

Some called for a boycott of the automaker after a report found it donated to lawmakers who voted against certifying the results of the presidential election.

(Bloomberg) -- China’s government bonds rallied, sending the benchmark 10-year yield to the lowest level since August, after the government indicated that the central bank could loosen its policy to support the economy.The yield on the most actively traded 10-year sovereign notes tumbled seven basis points to 2.99%, while futures contracts of the same tenor jumped by the most in over a year. A gauge of trader expectations for borrowing costs in the future slid to the lowest level since January.T

What happened Shares of Moderna (NASDAQ: MRNA) were falling 4.7% lower as of 11:55 a.m. EDT on Wednesday. The decline came after the company reported that the first participant has been dosed in a phase 1/2 study evaluating its quadrivalent flu vaccine.

Jitters—from rich valuations to the possibility of waning fiscal and monetary stimulus to Covid surges—sent the three major indexes tumbling.

Chip Roy was recorded admitting that Republicans would try to ‘slow down’ the Democrat’s legislative agenda ahead of the elections for Congress

The number of Americans filing new claims for unemployment benefits rose unexpectedly last week, with initial jobless claims rising 2,000 from the previous week to 373,000, an indication that the labor market recovery from the Covi-19 pandemic continues to be choppy. The number of claims had been expected to fall to a new post-pandemic low of 350,000.

(Bloomberg) -- Investors are backtracking on reflation bets, with the bond rally extending as central banks signal continued support and stocks falling as Covid-19 variants threatened reopening prospects.U.S. 30-year yields fell below 1.90% for the first time since February, even as the Federal Reserve discussed tapering its bond purchase program at its meeting last month. German and Chinese 10-year yields hit multi-month lows as traders positioned for a prolonged easy stance by the European Cen

It is an article of faith among central bankers that the decisions they make about how much money to create and what interest rate to charge for it will determine the rate of inflation - at least over moderate lengths of time. For more than a decade that belief has been undermined by inflation that has remained weak despite trillions of dollars pumped into the world's biggest economies through quantitative easing programs and ultra-low interest rates. That prompted the top central banks to review how they do business, and on Thursday the European Central Bank joined the Federal Reserve and the Bank of Japan in pursuing an ambitious reset in hopes of reasserting control.

AstraZeneca has a Covid vaccine, but the company is also a specialist in cancer treatments, and it supplies medicine for a host of other diseases.

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Stock in Virgin Galactic continued its wild upward ride Thursday. But it could be a different story after co-founder Richard Branson launches into space.

The excess in financial markets will have to unwind in a drastic manner, warns one veteran economist.

(Bloomberg) -- Taiwan Semiconductor Manufacturing Co. reported a 20% jump in quarterly sales, as the company raced to meet demand for chips from the automotive and other industries.Sales for the quarter ended in June came in at NT$372.1 billion ($13.3 billion), in line with the average analyst estimate of NT$371.3 billion. Revenue for June was NT$148.5 billion, up 23% from a year ago.“TSMC’s better pricing power on the back of the capacity tightness should largely offset the margin pressure it i

Paul Pelosi made $5.3 million after buying shares in Nasdaq giants ahead of a vote on a weak antitrust bill meant to curb their power.

S&P 500 Closes Lower as Volatility Returns Amid Growth Jitters By Investing.com

Investing.com 08 July, 2021 - 12:00am

Investing.com – The S&P 500 closed lower Thursday, as concerns grew about the global recovery at a time when the delta variant has caused a spike in infections, triggering a jolt of volatility that rattled investor sentiment. 

The S&P 500 fell 0.8% to 4,321.81, but had been as low as 4,289.17. The Dow Jones Industrial Average slipped 0.8%, or 259 points, and the Nasdaq was down 0.7%. The S&P 500 VIX Futures - or so-called fear index - jumped 17% to 19.00.

Fears over slowing growth were captured in the bond market, with the 10-year U.S. bond yield plunged to its lowest level since February.

But some on Wall Street are not buying the "peak growth" jitters and argue that there is runway for the recovery, paving the way for more gains in stocks. 

"We do not think the markets are worried about economic and earnings growth slowing from these robust levels, at least at this point," Wells Fargo (NYSE:WFC).  "We favor economically sensitive sectors like energy, industrials, materials and financials."

Beyond the boost from fears over slowing growth, a decline in the supply of bonds issued by the Treasury is also playing a role in boosting bond prices, sending yields lower.

The Treasury holds $733 billion in cash as of July 6, and is "way behind in making progress toward bringing their cash balances down to the $450 billion target for July 31 prescribed by the debt ceiling legislation," Jefferies (NYSE:JEF) said. "These paydowns will help the process along, but we still expect further cuts."

The spike in Covid-19 cases as the delta variant continues to spread has also put a damper on global growth and threatens the summer of travel, particularly in Europe, 

The labor market, meanwhile, continues to suggest a longer road to recovery as initial jobless claims unexpectedly rose by 2,000 to 371,000 last week. 

As the enhanced unemployment benefits come to end, Morgan Stanley (NYSE:MS) is backing a wave of supply to the hit the labor market that will help plug the current gap.   

"We continue to expect a bump in labor supply late summer as the remainder of the federal supplementary benefit programs are approaching expiration," Morgan Stanley said in a note.

The sea of red for rates usually translates into gains for tech, but growth sectors of the market also succumbed to selling pressure.

Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT, and Apple (NASDAQ:AAPL) were below the flatline. Amazon.com (NASDAQ:AMZN), however, bucked the trend to trade higher. 

Banks felt the pain of plummeting rates, with Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), and Goldman Sachs Group (NYSE:GS) falling more than 2%.  

In other news, cryptocurrency sensitive stocks were hurt by a plunge in bitcoin as risk-off sentiment spilled into cryptos.

Coinbase Global (NASDAQ:COIN), MicroStrategy (NASDAQ:MSTR), Square (NYSE:SQ) were down.

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