New Day, New Hope: U.S. Stock Futures Rise, Focus on Walmart
On Thursday morning, the futures for U.S. stock indexes experienced a slight rise after previously reaching a six-week low, which was caused by the surge in bond yields.
How are stock-index futures trading
- The S&P 500 futures climbed 0.20%, or 6 points, equating to a 0.1% rise and reaching a final tally of 4426.
- The YM00 futures, representing the Dow Jones Industrial Average, experienced a 0.1% increase of 50 points, resulting in a final value of 34871.
- The level of Nasdaq 100 futures increased by 29 points or 0.2%, reaching a value of 14971.
On Wednesday, there were declines in the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite. Specifically, the DJIA saw a drop of 181 points, the S&P 500 decreased by 34 points, and the Nasdaq Composite fell by 156 points.
What is propelling the markets forward?
The increase in bond yields has had an impact on the stock market, leading to uncertainty in the futures market. After the Federal Reserve released meeting minutes suggesting a possible increase in borrowing costs to manage inflation, government bond yields reached their highest level in 15 years. This caused the S&P 500 index to close at its lowest point in six weeks. As a result, investors are now reconsidering the timing of inflation concerns and whether higher interest rates will last longer than anticipated. Technology stocks, particularly the Nasdaq and S&P 500, have been heavily affected by the wave of selling due to their sensitivity to higher interest rates. Nonetheless, the overall market performance remains positive, with the Nasdaq up 29%, the S&P 500 up 15%, and the Dow Jones Industrial Average up 5% for the year.
Cisco Systems, a manufacturer of network equipment, is anticipated to have a positive impact on the technology industry on Thursday as its stocks are predicted to rise by over 2% in the premarket. This follows the announcement of impressive quarterly earnings by the company, which were made public after the market closed on Wednesday.
In the United States, there will be various economic updates on Thursday. These updates consist of two important events: the weekly report on initial jobless benefit claims as well as the August Philadelphia Fed manufacturing survey, both set to occur at 8:30 a.m. Eastern time. Furthermore, the leading economic indicators report is expected to be released at 10 a.m. on the same day.
Mark Newton, Fundstrat’s head of technical strategy, advises keeping a close watch on Treasury yields, comparing it to the vigilant observation of a prey by a “Hawk-eye”. According to him, the recent rapid decline in stock prices coincided with both TNX and TYX surpassing the 4.00% mark.
The TNX XX:TNX and TYX XX:TYX are the CBOE indices that indicate the yields of 10-year and 30-year Treasury bonds.
Newton mentioned that the previously mentioned support level for SPX, ranging from 4350 to 4400, will be tested sooner than anticipated. Despite this decline, Newton remains confident that it is only a temporary setback and expects a resurgence in the market afterwards. However, it is possible that this rally will be postponed until after the Jackson Hole summit.
The Jackson Hole Economic Symposium, which is expected to feature a speech from Federal Reserve Chair Jay Powell, has been planned for the dates of August 24th to 26th.
Companies in focus
- Before the market opened on Thursday, Walmart Inc.’s stock, identified by the ticker symbol WMT, rose by 2%. This came after the company reported second-quarter earnings that exceeded predictions.
- Cisco Systems Inc. experienced an initial decline in its stock price after the regular trading hours on Wednesday, but later experienced a 4% increase once their fiscal fourth-quarter results were announced. However, some investors were concerned by the company’s careful guidance for the full-year 2024.
- Hawaiian Electric Industries Inc. saw their stock value plummet by 13% after a report from the Wall Street Journal. The report revealed that the company had been engaging with restructuring specialists to determine the best course of action following the destructive wildfires in Maui.