por admin » Jue Sep 01, 2022 6:14 am
Stock Futures Decline Ahead of Jobs, Manufacturing Data
Oil prices extended a run of losses prompted by demand fears
Will HornerSept. 1, 2022 7:08 am ET
Futures tied to the S&P 500 fell 0.7% Thursday, while Nasdaq-100 futures dropped 1.1% and Dow Jones Industrial Average futures lost 0.5%. The major indexes suffered their fourth day of losses Wednesday, continuing a selloff that saw them end August with declines of between 4% and 5%.
Comments from Federal Reserve Chairman Jerome Powell last week which doubled down on his message that interest rates must continue rising to tame inflation—even if the economy suffers—have sent stocks tumbling. The declines have reversed much of the gains made during a summer rally that had lifted stocks and bonds from their lows.
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The fall has come as investors reassessed hopes that the Fed could soon ease off from its campaign of interest-rate increases. Instead, many are girding for a lengthier period of higher interest rates, though expectations of when the Fed will start cutting interest rates are likely still too hopeful, said David Donabedian, chief investment officer of CIBC Private Wealth US.
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“There was too much Fed optimism. The idea that the Fed was getting close to the end of tightening and would begin cutting rates next spring never really made sense to us,” he said.
“I feel a bit more optimistic about the market now over the next three to six months. There has been a reality check and a reassessment of expectations, and I prefer it when the market is in a sober mood rather than a euphoric one,” he said.
Yields on U.S. government bonds climbed to their highest levels since June, with the yield on the benchmark 10-year Treasury note up to 3.208% from 3.131% on Wednesday.
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Data due Thursday will give investors clues on the health of the economy and the employment market ahead of Friday’s highly-anticipated jobs report. Weekly jobless claims data are due at 8.30 a.m. ET, and purchasing managers’ survey data at 10 a.m. will give a reading of manufacturing activity.
In commodity markets, oil extended a streak of declines, falling for a third consecutive day, as worries about global demand mount. Brent crude futures fell 2.5% to $93.21 a barrel.
Fresh Covid-19 lockdowns in China are threatening to weaken oil demand, adding to jitters about flagging global growth. China’s city of Chengdu with a population of 21 million became the latest to impose restrictions, ordering residents to stay at home from Thursday afternoon, with citywide Covid testing planned through Sunday.
Metals prices are also slumping, dragged down by a stronger dollar—which makes dollar-denominated metals more expensive for holders of other currencies—and rising real yields. As August ended, gold reached its longest monthly losing streak since 2018, while copper hit its longest monthly losing streak since 2008. Both metals fell Thursday, by 0.7% and 0.8% respectively.
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Major U.S. stock indexes closed out August with losses of 4% or more.Photo: Michael M. Santiago/Getty Images
Overseas, major indexes fell across the board. In Europe, the pan-continental Stoxx Europe 600 retreated 1.7%, led by losses among mining and resource stocks. The index’s basic-resources sector slumped by 3.9%.
In Asia, stocks closed lower, with Japan’s Nikkei 225 shedding 1.5% and the Hang Seng in Hong Kong dropping 1.8%. In mainland China, the Shanghai Composite lost 0.5%.
—Raffaele Huang contributed to this article.