Benzinga - Trading in index futures suggests a potentially higher start by Wall Street stocks following Tuesday’s lackluster performance.
Cues From Tuesday’s Trading:
On Tuesday, stocks traded in a lackluster fashion and wallowed mostly below the unchanged line before closing lower. Tech stocks came under further selling pressure amid the rise in bond yields and some mixed economic data.
The Nasdaq Composite languished in the red throughout the session before ending lower for a second straight session. The broader S&P 500 Index spent the better part of the session below the unchanged line, barring a brief stay in the green in late trading.
The Dow Industrials was mostly higher in the morning session but fell decisively into negative terrain in early afternoon trading.
Both Dow and the S&P 500 Index snapped a three-session winning streak in the process.
Sentiment among S&P sectoral classes was mixed, with communication services stocks coming under intense selling pressure, while energy stocks were the best performers of the session,
| Nasdaq Composite | -0.45% | 11,716.08 | |
| S&P 500 Index | -0.16% | 3,971.27 | |
| Dow Industrials | -0.12% | 32,394.25 |
“While higher rates have already wreaked havoc on an overheated housing market and an overextended banking sector, corporate borrowers are going to continue to feel the sting,” said Daniel Berkowitz, Investment Director at Prudent Management Associates.
The analyst noted that the pandemic allowed companies to enjoy debt on extremely favorable terms. As this debt matures over the next few years, companies will likely have to refinance at potentially materially higher rates, he said. Higher interest expense, the analyst said might drag down corporate earnings and put pressure on market prices.
If the jobless claims data and the consumer price consumption expenditure index come in stronger than expected, “the market may need to recheck expectations for a much less aggressive Fed,” Berkowitz said.
“We know that the FOMC is watching these closely as well.”
Futures Today
| Nasdaq 100 Futures | +0.89% | |
| S&P 500 Futures | +0.87% | |
| Dow Futures | +0.74% | |
| R2K Futures | +1.76% |
Upcoming Economic Data:
The Mortgage Bankers Association’s mortgage application volume data for the week ended March 24 is due at 7 a.m. EDT. Applications volume rose for the third straight week in the week ended March 17.
Fed Governor Michael Barr is due to testify for a second day, this time before the House. The testimony on the banking crisis is scheduled to start at 10 a.m. EDT. Tuesday, he hinted at implementing tougher capital requirements and liquidity provisions for smaller banks.
The National Association Of Home Builders will release its pending home sales data for February at 10 a.m. EDT. Economists expect a 2.3% month-over-month drop in pending home sales, reversing some of the 8.1% increase in January.
The Energy Information Administration will release its customary weekly oil inventories report at 10:30 a.m. EDT.
The Treasury is set to auction seven-year notes at 1 p.m. EDT.
See also: Best Futures Brokers
Stocks In Focus:
- lululemon Athletica, Inc. (NASDAQ: LULU) climbed about 15% in premarket trading following its quarterly earnings beat.
- Micron Technology, Inc. (NASDAQ: MU) rose about 2.5% despite the memory chipmaker’s mixed quarterly results.
- UBS Group, Inc. (NYSE: UBS) added over 1% after the Swiss investment bank brought back former CEO Sergio Ermotti as its group CEO to assist with the Credit Suisse (NYSE: CS) takeover.
- Paychex, Inc. (NASDAQ: PYX), H.B. Fuller Company (NYSE: FUL) and Semtech Corp. (NASDAQ: SMTC) are among the important companies due to announce their quarterly results on Wednesday.
Crude oil futures were rising for a third straight session, as they climbed 1.13% to a two-week high of $74.03 in early European trading.
The yield on the benchmark 10-year Treasury note now slid 0.019 percentage points to 3.549%.
Most Asian markets advanced on Wednesday, with the Hang Seng, Nikkei 225 Average and the Jakarta Composite leading from the front. European stocks were higher for a third consecutive session, with buying surge perking up in late-morning trading.
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