By Dhirendra Tripathi
Investing.com -- Stocks were mixed on Thursday heading into the final minutes of trading as investors weighed the timing of the Federal Reserve’s eventual tapering of its massive bond buying program.
Minutes of the July Fed meeting released on Wednesday suggested the Fed could begin reducing its bond buying later this year. While this would not come as a surprise to the market, investors nevertheless fret over the effect on stocks, which have been turbo-charged in the last year since the worst of the pandemic.
The S&P energy sector was the worst performer on Thursday as oil prices slumped another 2%. Signs of slowing growth, combined with a surge in new Covid-19 cases linked to the highly contagious delta variant, are making investors nervous about a fresh round of business shutdowns.
Goldman Sachs (NYSE:GS) cut its forecast for third quarter economic growth to 5.5% from 8.5%, citing the damage the Delta variant spread would have on the economic recovery. That said, it raised its fourth quarter forecast to 6.5% from 5.5%.
Supply chain disruptions emerging from the pandemic continue to vex businesses, forcing them to raise prices and in some cases cut output
On Thursday, major automakers such as Toyota Motor Corporation ADR (NYSE:TM)and Ford Motor Company (NYSE:F) said they would have to temporarily cut production or close plants because of a shortage of computer chips and other parts.
In positive news, unemployment claims fell to a 17-month low last week, further evidence of recovery in the job market.
The Fed's annual symposium in Jackson Hole, Wyoming, next week could provide investors fresh clues on the central bank's next steps.
Here are three things that could affect markets tomorrow
1. Robinhood drama
Shares of popular mobile brokerage Robinhood Markets Inc (NASDAQ:HOOD) plunged 11$ on Thursday after it warned that trading was slowing down. Robinhood has been a favorite vehicle of retail traders engaged in the so-called meme stock trade. It recently launched its own initial public offering.
On Wednesday it said it expected considerably fewer new funded accounts in the ongoing quarter than in the previous three months, which means lower revenue in the current quarter.
Total revenue soared 131% to $565 million in the second quarter as retail traders from the Reddit gang and everywhere else piled on the platform to trade in cryptocurrencies and equities. Expect the volatility to continue into Friday.
2. Farm equipment sales
Deere & Company (NYSE:DE), a maker of farm and construction equipment, reports results on Friday. Analysts expect third-quarter earnings per share of $4.57 on revenue of $10.3 billion. Listen to what the company says about the supply chain and orders heading into the last few months of the year.
3. Shoe retailer earnings
Foot Locker Inc (NYSE:FL) got a bounce earlier this year as consumers took their federal government stimulus checks and went shopping for new athletic shoes. With back-to-school season now in high gear, expect executives to outline their view of same store sales going forward. The company is seen clocking revenue of $2.07 billion in the second quarter and EPS of 97 cents.