Friday October 21st

U.S. stock markets index futures fell Friday as investors assessed more corporate earnings reports and higher U.S. bond yields. Futures for the Nasdaq 100 slipped 1.2%, while futures linked to the Dow Jones Industrial Average lost 213 points, or 0.7%. S&P 500 futures dropped 0.8%. Those moves came Snap reported a quarterly revenue of $1.13 billion, below expectations. That revenue represents year-over-year growth of just 6%. Average revenue per user, a key metric for the company, fell 11% to $3.11. Dow component American Express fell more than 4% in premarket trading after its quarterly report. “The mindset is quite gloomy with stocks for sale pretty much everywhere. The culprit behind the negativity is earnings with a slew of disappointments around the world,” wrote Adam Crisafulli of Vital Knowledge. Meta Platforms shares fell nearly 4% in the premarket, while Alphabet dipped 1.8%. Those moves come after the indexes fell for a second day, with the Dow shedding 90.22 points, or 0.3%. The S&P 500 and Nasdaq Composite were down 0.8% and and 0.6%, respectively. It was a day that started on better footing for the Dow, which was up nearly 400 points at session highs, but rising Treasury yields threw cold water on stocks. The 10-year Treasury yield is trading at levels not seen since 2008. On Friday, it traded around 4.26%. Thursday’s trading fits a broader picture of jittery investors making knee-jerk decisions based on the news of the day, said Jamie Cox, managing partner for Harris Financial Group. He said investors are increasingly moving into shorter-term strategies as they see the Federal Reserve creating a volatile market as it seeks to bring down inflation through interest rate hikes. “Markets look for every sign that the inflation data is moving in such a way that the Fed can reduce its pace of interest rates, and are basically ignoring speakers and governors, and basically ignoring everything the Fed to say,” Cox said. “It lends itself to very, very choppy trading because people are trigger happy and just waiting for the signal that the pause is coming,” he said. “It’s a bad way to trade and it brings lots of volatility.” The major averages are still on track for a winning week, up more than 2% through Thursday. Shares in the Asia-Pacific traded lower on Friday as investors weigh inflation data from several economies. The Nikkei 225 in Japan slipped 0.43% to 26,890.58 and the Topix lost 0.71% to 1,881.98. Japan’s yen weakened further to touch 150.45 after breaching 150 against the dollar on Thursday. In Australia, the S&P/ASX 200 fell 0.8% to 6,676.80. South Korea’s Kospi was down 0.22% at 2,213.12, and the Kosdaq shed 0.88% to 674.48. MSCI’s broadest index of Asia-Pacific shares was 0.73% lower. Hong Kong’s Hang Seng index gave up gains to fall 0.38% in the final hour of trade. The Shanghai Composite in mainland China bucked the region trend to gain 0.16% to 3,039.81 and the Shenzhen Component was 0.423% lower at 10,918.97. Oil steadied on Friday as investors weighed the impact of sharp interest rate rises on energy consumption, offsetting hopes of higher Chinese demand and output cuts by OPEC and its allies. To fight inflation, the U.S. Federal Reserve is trying to slow the economy and will keep raising its short-term rate target, Federal Reserve Bank of Philadelphia President Patrick Harker said on Thursday. Brent crude was up 32 cents to $92.70 a barrel. U.S. West Texas Intermediate crude was up by 24 cents, or 0.28%, to $84.75. Gold prices fell on Friday and were on track for a second straight weekly drop, as prospects of higher interest rates and rising bond yields challenged bullion’s safe-haven appeal. Spot gold shed 0.4% to $1,620.79 per ounce. Bullion prices have shed 1.1% this week. U.S. gold futures fell 0.6% to $1,626.8. Benchmark 10-year Treasury yields scaled a fresh peak since June 2008, while the dollar index held steady, making gold a less favored bet for investors. “Gold continues to be driven by the ebb and flow in yields as well as the strength of the U.S. dollar,” said Michael Hewson, chief market analyst at CMC Markets UK.