Stock index futures fight for direction after volatile session as investors await testimony from Powell

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Stock index futures moved between small gains and losses on Tuesday, a day after a volatile session that saw stocks sell off sharply amid concerns over the resumption of coronavirus lockdowns in Europe and the rise of the political uncertainty in the United States, but end the session lows well.

Futures sur le Dow Jones Industrial Average YM00,
+ 0,05%
were down 27 points, or 0.1%, to 27,028, while S&P 500 ES00 futures,
+ 0,29%
edged up 3.4 points, or 0.1%, to 3,278.50. Nasdaq-100 NQ00 Futures,
+ 0,73%

NQ00,
+ 0,73%
gained 56.50 points, or 0.5%, to 11,045.50, indicating new strength in tech stocks.

Stocks fell sharply on Monday, but ended well above session lows The Dow DJIA,
+ 0,29%
fell 509.72 points, or 1.8%, to end at 27,147.70, after falling more than 900 points to its session low. The S&P 500 SPX,
+ 0,56%
fell 38.41 points, or 1.2%, to end at 3,281.06 for its fourth consecutive daily decline, its longest losing streak since February. The Nasdaq Composite COMP,
+ 0,72%
loses 14.48 points, or 0.1%, ending at 10,778.80.

What are the main benchmarks doing?

Rising cases of COVID-19 and threat of new lockdowns in Europe, along with growing doubts about the prospects for Congressional Democrats and the White House to reach agreement on further aid – a prospect complicated by the looming battle over a candidate to replace Ruth Bader Ginsburg, who died in the Supreme Court on Friday, has been partly blamed for Monday’s sale.

But stocks came out of lows and appeared poised to test higher on Tuesday. Stocks were under pressure for much of September, with major benchmarks suffering three consecutive weekly declines.

“Coronavirus concerns have resurfaced, worrying investors that a reversal of reopening progress could be near. More and more uncertainty arises as we move closer to the election, but no closer to Congressional budget relief, ”said Lindsey Bell, chief investment strategist for Ally Invest, in a note. “But we are still optimistic that this drop will be purchased as soon as possible.”

Monday’s selloff, unlike the tech slide the week before, was punctuated by value stocks, such as industrials, energy and financials, noted Charalambos Pissouros, senior market analyst at JFD Group.

“It makes sense to us, as tech companies could be the least affected in the event of a second round of lockdowns around the world,” he said.

Investors remain focused on increasing COVID-19 cases as the UK moves to reimpose some lockdown restrictions, while Federal Reserve Chairman Jerome Powell will tell lawmakers it’s up to them to Relieving some struggling businesses as doubts remain about the prospects of another aid package, according to prepared testimony released late Monday. Powell appears before the House Financial Services Committee at 10:30 a.m. Eastern Time.

August data on existing home sales is due at 10 a.m. Federal Reserve Bank of Richmond Chairman Tom Barkin will deliver remarks at a noon event, while Atlanta Fed Chairman Raphael Bostic will speak at 3 p.m.

Which companies are targeted?
  • Shares of electric car maker Tesla Inc.
    TSLA,
    -4,87%
    were down more than 3% in pre-market trading prior to the company’s “Battery Day” event. General manager Elon Musk aimed to tone down expectations ahead of the event, tweeting Monday evening that products due to be unveiled “will not reach serious high-volume production until 2022” See:3 things to know about Tesla’s “battery day”

  • Amazon.com Inc.
    AMZN,
    + 2,31%
    Shares rose 1.9% in pre-market trading after the ecommerce giant was upgraded to outperform market performance by analysts at Bernstein.
What are other markets doing?

The yield of the 10-year Treasury bill TMUBMUSD10Y,
0,673%
rose 0.3 basis point to 0.672%. Bond prices move inversely with yields.

L’indice ICE US Dollar DXY,
-0,07%,
was stable after jumping 0.7% on Monday as investors sought havens amid selling global equities.

GCZ20 gold futures,
+ 0,60%
was trading at $ 1,911 an ounce, up less than 0.1% as the yellow metal swung between small gains and losses. CLX20 oil futures,
+ 0,98%
were up slightly, trying to bounce back from a steep drop in the previous session.

The pan-European Stoxx Europe 600 SXXP index,
+ 0,52%
and the British reference FTSE UKX,
+ 0,46%
were each up 0.4%. In Asia, the Hong Kong Hang Seng HSI index,
-0,97%
down 1% and the Shanghai SHCOMP Composite Index,
-1,28%
loses 1.3%, while the Japanese Nikkei NIK,
+ 0,17%
remained closed on a public holiday.

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