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Market Snapshot: Stock futures struggle for traction after dramatic day of selling, as nonfarm payrolls data looms

U.S. stock futures wobbled ahead of important nonfarm payroll data on Friday, and after a frantic day of selling on Wall Street, driven by investor concerns over the Federal Reserve’s ability to get inflation under control.

How are stock-index futures trading?

Dow Jones Industrial Average futures
YM00,
-0.09%

were flat at 32,921

S&P 500 futures
ES00,
-0.11%

were steady at 4,143

Nasdaq-100 futures
NQ00,
-0.12%

were unchanged at 12,858

On Thursday, the Dow industrials
DJIA,
-3.12%

slumped 1,063.09 points, or 3.1%, ending at 32,997.97, its worst daily percentage drop since Oct. 28, 2020, according to Dow Jones Market Data. The S&P 500 
SPX,
-3.56%

fell 153.30 points, or 3.6%, to 4,146.87, while the Nasdaq Composite 
COMP,
-4.99%

tumbled 647.16 points, or 5%, to 12,317.69, its worst daily percentage fall since June 11, 2020.

What’s driving markets?

Investors will turn their attention to jobs data, with April nonfarm payrolls expected to show a gain of 400,000, from a 431,000 rise in the prior month, according to a survey of economists from Dow Jones and the Wall Street Journal.

“A print north of 500,000 should provoke a faster tightening by the Fed possible recession equals selling equities, bonds, gold, cryptos, DM [developed markets] and EM [emerging markets] FX, buy U.S. dollars reaction,” Jeffrey Halley, senior market analyst at OANDA, told clients in a note.

“Conversely, a print under 300,000 should see a sigh of relief less Fed tightening rally. Buy equities, bonds, gold, cryptos, DM and EM currencies and sell US dollars. It’s that sort of market,” said Halley.

Chris Weston, head of research at Pepperstone, said the inflationary component of payrolls — average hourly earnings — could be an even bigger market mover than the jobs numbers themselves.

“Given the market’s concerns about inflation (as discussed above), should we get a reading above 5.5% and certainly into 6% then bond yields should rise, the USD should rally hard, and equities could face another torrid time,” Weston told clients in a note.

Investors will also hear from New York Fed President John Williams, and later in the day, St. Louis Fed President James Bullard and Fed Gov. Chris Waller. In between, consumer credit for March is ahead.

Major indexes are set to end the week largely unchanged, which belies volatile action seen in recent days. Stocks surged Wednesday after as-expected Federal Reserve tightening, and perceptions that the central bank may be less hawkish than perceived. But those gains reversed, and then some on Thursday.

Read: Why did the Dow plunge more than 1,000 points? Should I wait for stocks to sink lower? Here’s what some pros think.

Some blamed Thursday’s sharp drop, in part, on a divided decision by the Bank of England to hike interest rates to the highest level since 2013, alongside a grim economic forecast.which was accompanied by a grim economic forecast.

That rubs against the assertion by Powell and other senior Fed officials that they can achieve a so-called soft landing — lowering inflation without bringing economic growth to a grinding halt.

“What’s dangerous about yesterday’s huge market slump is that there must be an element of doubting the ability of there to be an effective ‘Fed Put’ in this cycle following a 30-40 year period where the central bank has almost always been able to come to the market’s rescue,” said a team of Deutsche Bank strategists led by Jim Reid.

Yields on 10- and 30-year Treasury bonds hovered at 2018 highs, which they reached Thursday as stocks plunged. The 10-year yield
TMUBMUSD10Y,
3.079%

was slightly higher at 3.07% and the 30-year yield
TMUBMUSD30Y,
3.163%

was slightly lower at 3.15%.

The dollar
DXY,
-0.34%

and gold
GC00,
+0.19%

were steady, and oil prices
CL00,
+1.60%

were slightly higher.

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