Business

Inventory futures combat for course as equities pause after shedding streak

Stock futures were mixed Tuesday on the heels of another sharply negative day for US equities. The S&P 500 closed out Monday’s regular session lower for a fourth straight day, marking its longest losing streak since February.

Futures on the S&P 500 flipped slightly above the flat line in early trading, and Nasdaq futures were about 0.5% higher. Contracts on the Dow held in slightly negative territory, after shedding as many as 900 points on Monday before paring declines to close lower by 500 points. Components Apple (AAPL) and Microsoft (MSFT) each rose more than 1% amid a broader rise in tech names.

A blend of uncertainty around the election, a worsening coronavirus situation in Europe and parts of the US, scrutiny over big banks and concerns that further economic stimulus may not come to near-term fruition have combined to weigh heavily on equity investors, sending the S&P 500 now more than 8% below its Sept. 2 closing high. And while many tech stocks shook off earlier losses to close higher, the group as a whole has been under press the past few weeks following a run-up earlier this summer.

“Coming into September, the options market among other things and the figures on public participation showed that there was a lot of froth, particularly in the high-flying Nasdaq-type stocks. And from our point of view, the weakness in September is pretty reliable from a seasonal perspective,” Julian Emanuel, BTIG managing director and chief equity derivatives strategist, told Yahoo Finance.

In terms of whether equities may slide further, “We think you have further to go,” Emanuel added. “We’re keying off the 200-day moving average to the S&P 500, currently at about 3,100 versus 3,250 or so where we are, so certainly more there, and likely a bit more than that in the Nasdaq, which really had gotten ahead of itself.”

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“We have been in an environment where the Vix (^VIX) has hovered in and around 30 essentially since March,” he said, referring to the volatility-tracking index that spiked to as high 82 in March before easing. “And when you back that out, that’s part of why the markets advanced as much as they did. But when you’re thinking about how much the market should correct, you know, a normal sort of 5% to 10% correction in the S&P 500 was appropriate in a Vix environment of, call it 15 to 20. We’re in a higher volatility environment – probably means probably pullback in our view.”

Investors also continued to eye updates on fiscal stimulus, though prospects of another package passing through Congress before the November elections have dimmed. Congressional lawmakers may direct questions around the pace of the economic recovery, and seek commentary around monetary and fiscal stimulus developments from Federal Reserve Chair Jerome Powell and US Treasury Secretary Steven Mnuchin on Tuesday, with both set to testify before the House Financial Services Committee on Tuesday.

7:50 a.m. ET: UK imposes new restrictions as country hits ‘perilous turning point’ over Covid-19: Johnson

UK Prime Minister Boris Johnson on Tuesday announced new restrictions on business operations in the country as it and others in Europe struggle to contain a resurgence in coronavirus cases. In a speech Tuesday evening in the UK, Johnson said the country had hit a “perilous turning point” over Covid-19, as cases there and in nearby Spain and France continued to rise.

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The new measures include an early 10 p.m. closure mandate for restaurants and pubs. Johnson also encouraged individuals to work from home as much as possible and imposed a mandatory face covering policy for those traveling in taxis and working in hospitality.

7:19 a.m. ET Tuesday: Stock futures point to a mixed open

Here were the main moves in markets, as of 7:19 a.m. ET:

  • S&P 500 futures (ES=F): 3,279.00, up 4 points or 0.12%

  • Dow futures (YM=F): 27,028.00, down 27 points or 0.1%

  • Nasdaq futures (NQ=F): 11,040.25, up 51.25 points, or 0.47%

  • Crude (CL=F): +$0.63 (+1.6%) to $39.94 a barrel

  • Gold (GC=F): +$1.50 (+0.08%) to $1,912.10 per ounce

  • 10-year Treasury (^TNX): +0.5 bps to yield 0.676%

6:13 p.m. ET Monday: Stock futures slip after volatile session

Here were the main moves in equity markets, as of 6:14 p.m. ET Monday:

  • S&P 500 futures (ES=F): 3,273.00, down 2 points or 0.06%

  • Dow futures (YM=F): 27,035.00, down 20 points or 0.07%

  • Nasdaq futures (NQ=F): 10,969.75 down 19.25 points, or 0.18%

NEW YORK, NEW YORK - SEPTEMBER 17: Bhairavi Desai speaks into a megaphone as taxi cab drivers hold a small rally in front of the New York Stock Exchange on September 17, 2020 in New York City. New York City taxi cab drivers held a day of action calling for debt forgiveness for loss of income amid work shortage due to the coronavirus (COVID-19) pandemic. (Photo by Michael M. Santiago/Getty Images)
NEW YORK, NEW YORK – SEPTEMBER 17: Bhairavi Desai speaks into a megaphone as taxi cab drivers hold a small rally in front of the New York Stock Exchange on September 17, 2020 in New York City. New York City taxi cab drivers held a day of action calling for debt forgiveness for loss of income amid work shortage due to the coronavirus (COVID-19) pandemic. (Photo by Michael M. Santiago/Getty Images)

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