Futures Pointing To Extended Weakness On Wall Street

wallstreet oct29 19sep22 lt

Stocks are likely to move to the downside in early trading on Monday, extending the sharp pullback seen last week. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 259 points.

Lingering concerns about the outlook for the global economy are likely to continue to weigh on the markets after last week's warning from FedEx (FDX).

An increase in treasury yields may also contribute to continued weakness on Wall Street, with the yield on the benchmark ten-year note jumping to an eleven-year high.

The advance by treasury yields comes ahead of the Federal Reserve's highly anticipated monetary policy announcement on Wednesday.

The Fed is widely expected to raise interest rates by another 75 basis points, although some see an outside chance for a 100 basis point rate hike.

CME Group's FedWatch Tool is currently indicating an 80.0 percent chance of a 75 basis points rate hike and a 20.0 percent chance of a 100 basis point rate hike,

A number of other major central banks around the world are also scheduled to announce their latest monetary policy decisions this week, including the Bank of England and the Bank of Japan.

Not long after the start of trading, the National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of September. The housing market index is expected to edge down to 48 in September from 49 in August.

After coming under pressure over the course of Thursday's session, stocks saw further downside during trading on Friday. The major averages all moved to the downside on the day, ending the session at their lowest closing levels in two months.

The major averages climbed well off their lows of the session going into the close but remained in negative territory. The Dow fell 139.40 points or 0.5 percent to 30,822.42, the Nasdaq slumped 103.95 points or 0.9 percent to 11,448.40 and the S&P 500 slid 28.02 points or 0.7 percent to 3,873.33.

With the extended downward move, the major averages all posted steep losses for the week. The Dow tumbled by 4.1 percent, while the S&P 500 plunged by 4.8 percent and the Nasdaq plummeted by 5.5 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Monday, with the Japanese markets closed for a holiday. China's Shanghai Composite Index fell by 0.4 percent, while Hong Kong's Hang Seng Index slumped by 1.0 percent.

The major European markets have also moved to the downside on the day. While the French CAC 40 Index has tumbled by 1.0 percent, the U.K.'s FTSE 100 Index and the German DAX Index are down by 0.6 percent and 0.5 percent, respectively.

In commodities trading, crude oil futures are plunging $2.35 to $82.76 a barrel after inching up $0.01 to $85.11 a barrel last Friday. Meanwhile, after rising $6.20 to $1,683.50 an ounce in the previous session, gold futures are advancing sliding $10.40 to $1,673.10 an ounce.

On the currency front, the U.S. dollar is trading at 143.51 yen versus the 142.92 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $0.9989 compared to last Friday's $1.0016.

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