Wednesday September 8th


Stock futures are flat following the Dow’s 260-point loss

U.S. stock index futures were flat after the Dow Jones Industrial Average fell more than 200 points in the prior session, as investors reassessed the economic growth outlook following a smooth ride in the market so far this year. Futures on the Dow dipped about 20 points, paring the worst of their losses overnight. S&P 500 futures and Nasdaq 100 futures dipped 0.04% and 0.03%, respectively. The S&P 500 fell 0.3% on Tuesday in relatively thin trading following the Labor Day weekend. The blue-chip Dow dropped 260 points, weighed down by 3M and Honeywell, while the tech-heavy Nasdaq Composite rose less than 0.1% to eke out a record close. Many investors are bracing for more volatility in September, one of the seasonally weakest months of the year. Price swings could make a comeback, especially with the S&P 500 up about 20% this year without a single 5% pullback. “We see a bumpy September-October as the final stages of a mid-cycle transition play out,” Morgan Stanley chief cross-asset strategist Andrew Sheets said in a note. “The next two months carry an outsized risk to growth, policy and the legislative agenda.” On Wednesday, the Labor Department will release its closely watched Job Openings and Labor Turnover Survey. Meanwhile, the Federal Reserve is set to publish its periodic “Beige Book” survey of activity across its 12 districts. One of the catalysts for a sell-off could be the Federal Reserve and the potential for it to pull back an unprecedented monetary stimulus to support the economy throughout the pandemic. Fed Chairman Jerome Powell has indicated that the central bank is likely to begin withdrawing some of its easy-money policies before year-end, though he still sees interest rate hikes in the distance. Still, the outlook for the liftoff is clouded by the coronavirus variant and the latest jobs report, which showed a big disappointment. “Stocks have posted much stronger than average gains, with much shallower than average pullbacks,” Keith Lerner, chief market strategist at Truist, said in a note. “It would be perfectly normal to see at least one gut check before year end.” Shares in Asia-Pacific were mixed on Wednesday, with shares of China Evergrande Group recovering slightly after briefly falling below their IPO price. Hong Kong’s broader Hang Seng index closed 0.12% lower at 26,320.93. Mainland Chinese stocks closed mildly lower, with the Shanghai composite slipping fractionally to 3,675.19 and the Shenzhen component shedding 0.101% to 14,688.08. Elsewhere, South Korea’s Kospi shed 0.77% to close at 3,162.99. In Japan, the Nikkei 225 rose 0.89% to close at 30,181.21 while the Topix index gained 0.79% to finish the trading day at 2,079.61. Oil prices rose on Wednesday as U.S. Gulf of Mexico producers made slow progress in rebuilding output, although gains were capped by a stronger dollar and concerns about the impact on demand of rising coronavirus infections. Brent was up 80 cents, or 1.1%, at $72.50 a barrel, and U.S. West Texas Intermediate (WTI) crude rose 94 cents, or 1.4%, to $69.29 a barrel. Gold prices edged higher on Wednesday after a steep fall in the previous session, as concerns about global growth slowdown weighed on risk sentiment while investors awaited the European Central Bank’s tapering strategy. Spot gold was up 0.2% at $1,797.30 per ounce by 0934 GMT, after falling to an over one-week low of $1,791.90 on Tuesday. U.S. gold futures were steady at $1,799.20.