U.S. stock futures pressured over rising yields, China trouble – MarketWatch
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Market Snapshot
Published: Aug. 18, 2023 at 5:07 a.m. ET
e S&P 500 has dropped for 10 of the last 13 trading days
Getty Images/iStockphoto
[]U.S. stock futures on Friday were trading near the lowest closing value in about two months, as investors react to rising bond yields and China’s economic turmoil.
What’s happening
- Dow Jones Industrial Average futures YM00, -0.14% fell 18 points, or 0.1%, to 34518.
- S&P 500 futures ES00, -0.19% dropped 3 points, or 0.1%, to 4382.
- Nasdaq 100 futures NQ00, -0.31% decreased 25 points, or 0.2%, to 14754.
[]On Thursday, the Dow Jones Industrial Average DJIA fell 291 points, or 0.84%, to 34475, the S&P 500 SPX declined 34 points, or 0.77%, to 4370, and the Nasdaq Composite COMP dropped 158 points, or 1.17%, to 13317.
[]The S&P 500 has dropped for 10 of the last 13 trading days, and ended Thursday as its lowest value since June 26.
What’s driving markets
[]The big story in markets is the deteriorating value of longer-duration government bonds, with the 10-year yield BX:TMUBMUSD10Y near its highest level since 2008, and the 30-year yield BX:TMUBMUSD30Y at its highest level in more than a decade.
[]“A major part of the reason for higher long rates is how much the new issuance by the U.S. Treasury, with pent-up needs after the delay of the budget ceiling brinkmanship, the lack of buying by the Fed who had been the major buyer of all auctions during QE and are now letting their massive portfolio roll off as it matures, and that traditional buyers of fixed income are reluctant to settle for lower yields of longer maturities when they can just sit in shorter less volatile maturities at higher yields,” said Louis Navellier, chairman and founder of Navellier & Associates.
[]Market attention also is focused on China at the moment, after builder Evergrande filed for bankruptcy protection in U.S. courts, and the People’s Bank of China stepped in to help its beleaguered currency.
[]The expiration of key options contracts may add volatility, particularly were the S&P 500 to decline to the 4,320 level, according to Nomura strategist Charlie McElligott.
[]There’s no economic data set for release, ahead of next week’s gathering of Federal Reserve officials in Jackson Hole, Wyo.
Same bank, 2 different stock-market calls. Why internal disagreements rage on Wall Street.
[]Wall Street strategists and economists working for the same employers are increasingly comfortable offering conflicting views to clients and the media.
[]Steven Goldstein is based in London and responsible for MarketWatch’s coverage of financial markets in Europe, with a particular focus on global macro and commodities. Previously, he was Washington bureau chief, directing MarketWatch’s economic, political and regulatory coverage. Follow Steve on Twitter: @MKTWgoldstein.
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