Thursday September 9th

9-09-2021

The Dow is set to fall for a fourth day with stock futures pointing to further losses

U.S. stock index futures were lower on Thursday as investors remained cautious as they try to discern what’s next to happen with the delta variant, the economic reopening and the Federal Reserve. Dow Jones Industrial average futures fell 85 points, or 0.2%. S&P 500 futures and Nasdaq 100 futures both lost 0.2% as well. On Wednesday, the Dow and S&P 500 fell for the third straight day. The Dow shed 68 points, and the S&P 500 slid 0.13%. Both are in the red for the week and for the month so far. September historically can be a treacherous month for stocks. The Fed meets on Sep. 21-22 and investors are worried the central bank will indicate a move to slow down its monthly $120 billion in bond purchases, which have kept rates low and boosted the recovery from the pandemic. “This may not end now. But when it ends, it could end badly,” wrote Savita Subramanian, head of equity and quantitative strategy at Bank of America, in a note Wednesday. “If taper means no uspide to the S&P 500, tightening could be worse.” Subramanian has a 4,600 year-end S&P 500 target, about 2% from here. The market still hasn’t regained its footing since the August jobs report released Friday came in much worse than expected. Weekly jobless claims will be released later on Thursday. Economists polled by Dow Jones expected 335,000 Americans filed for unemployment last week, down from the previous week’s 340,000 claims. Cisco shares fell in premarket trading after Morgan Stanley downgraded the stock, saying the big gains this year were enough. Meme-favorite GameStop dropped 7% even after the video-game retailer posted better-than-expected results. The retailer did not provide an outlook or grander turnaround plans. Boston Beer tanked more than 9% after pulling its earnings guidance amid slowing growth in its hard seltzer brand. Shares of athletic  retailer Lululemon surged more than 13% and furniture retailer RH rose 1.32% in after-hours trading on the back of better-than-expected earnings. Lululemon also offered a stronger-than-forecast outlook for the third quarter and the year. On Wednesday, the Federal Reserve said in its latest “Beige Book” that U.S. businesses are experiencing rising inflation that is being intensified by a shortage of goods and likely will be passed onto consumers in many areas. The Fed also reported that growth overall had “downshifted slightly to a moderate pace” amid rising public health concerns during the July through August period that the report covers. Despite recent losses, the major benchmarks are still up big for the year and within striking distances of their all-time highs. The S&P 500, up 20% in 2021, is less than 1% from its all-time high. The Dow, up 14% this year, is about 1.7% from a record. Hong Kong stocks dropped on Thursday, with shares in the rest of Asia-Pacific also largely declining. The broader Hang Seng index in Hong Kong dropped 2.3% on the day to 25,716. Mainland Chinese stocks close higher: the Shanghai composite advanced 0.49% to 3,693.13 while the Shenzhen component rose fractionally to 14,698.53. Elsewhere, the Nikkei 225 in Japan closed 0.57% lower at 30,008.19 while the Topix index fell 0.71% to 2,064.93. South Korea’s Kospi declined 1.53% to end the trading day at 3,114.70. Oil prices remained steady on Thursday as the Delta variant of the coronavirus continues to weigh on the demand outlook, offsetting a decline in U.S. Gulf of Mexico output because of damage caused by Hurricane Ida. Brent crude rose 4 cents to $72.64 a barrel by 0901 GMT and West Texas Intermediate (WTI) crude fell 11 cents, or 0.16%, to $72.64. About 77% of U.S. Gulf production remained offline on Tuesday, equating to about 1.4 million barrels per day (bpd). The market has lost about 17.5 million barrels of oil so far. Gold prices firmed on Thursday after three straight sessions of losses as the dollar rally paused and investors’ focus turned to the European Central Bank’s meeting which is expected to signal a tapering of its emergency economic support. Spot gold rose 0.3% to $1,794.17 per ounce by 0905 GMT, bouncing off a two-week low touched on Wednesday. U.S. gold futures were up 0.2% at $1,796.70.