Benzinga - by Shanthi Rexaline, Benzinga Editor. Trading in stock futures suggests traders could be preparing to leave the worst behind and look ahead to the new week with new hopes. Positive expectations concerning Nvidia Corp.’s (NASDAQ:NVDA) earnings could offer support to the tech space, although traders will be keyed in to see what Federal Reserve Chair Jerome Powell has to stay in Jackson Hole Symposium.
Cues From Past Week's Trading:
Stocks closed out the week ended Aug. 18 on a down note as a string of positive economic data intensified fears concerning more aggressive interest rate hikes. This sent bond yields spiking higher, with the 10-year Treasury note yield rising as high as 4.328% midweek, the highest since late October 2022, before seeing a letup.
The selling was more severe in growth and small-cap stocks. The tech-heavy Nasdaq Composite Index and the broader S&P 500 gauge declined in four out of the five sessions of the week, settling at the lowest levels in about two months. The averages recorded weekly losses for three straight weeks now.
US Index Performance In Week Ended Aug. 18
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -2.60% | 13,290.78 |
| S&P 500 Index | -2.11% | 4,369.71 |
| Dow Industrials | -2.21% | 34,500.66 |
| Russell 2000 | -3.18% | 1,859.42 |
Analyst Color:
LPL Chief Global Strategist Quincy Crosby weighed in on the equity market weakness and delved into two catalysts that can lend support.
“The S&P 500 is sitting in short-term oversold territory, a technical measure encompassing numerous components including investor sentiment along with a host of more esoteric measures,” the analyst said.
With the Jackson Hole conference, traders and investors alike may wait to hear from Fed Chair Jerome Powell before coming back into the market, he said.
“They’ll judge whether he’s hawkish, dovish, or if he stands by his standard retort that the Fed remains data dependent, essential neutral, or something in between,” he added.
Crosby also highlighted another important catalyst, namely “China’s escalating assortment of tangled financial problems” that could trigger a contagion-fueled domino slide in financial markets, forcing money flow into the U.S. Treasury market for safety.
This has the potential to send Treasury prices higher, and in turn yields lower, he said.
Futures Today
Futures Performance On Monday
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.54% |
| S&P 500 | +0.45% |
| Dow | +0.33% |
| R2K | +0.28% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.39% to $438.20 and the Invesco QQQ ETF (NASDAQ:QQQ) gained 0.55% to $360.09, according to Benzinga Pro data.
Upcoming Economic Data:
The week's economic calendar will likely be headlined by the Fed's Jackson Hole Symposium, which is set to start Thursday. Heads of central banks, other central banks, and academicians take part in this closed-door event but the participants give interviews between meetings.
Traders may also focus on a couple of housing market readings, namely the July new and existing home sales, the durable goods orders report for July, S&P Global's flash manufacturing and service sector purchasing managers' indices for August, the University of Michigan's final consumer sentiment reading for August, and the routinely scheduled weekly jobless claims data.
Previewing the week ahead event, Comerica Chief Economist Bill Adams said the Bureau of Labor Statistics will revise payroll employment covering April 2022 to March 2023 to incorporate more complete source information from the Quarterly Census of Employment and Wages.
“A large downward revision would imply more slack in the labor market than current data indicate; an upward revision would mean the opposite,” he added.
Over the 12-month period, the economy on average added 337,000 jobs per month, according to already-published data.
On Monday, the Treasury will auction three-month and six-month notes at 11:30 a.m. EDT.
See also: How To Trade Futures
Stocks In Focus:
- Palo Alto Networks, Inc. (NASDAQ:PANW) rallied nearly 13% in premarket trading, as the stock reacted to its quarterly results released Friday after the close of markets.
- Tesla, Inc. (NASDAQ:TSLA) rose over 3%, as it rebounds from a six-session losing streak.
- Nvidia added 2% after analysts issued upbeat commentary about its imminent quarterly report.
- Nordson Corp. (NASDAQ:NDSN) is scheduled to release its quarterly results after the market close.
Crude oil futures rose 1.03% to $81.42 in early European session on Monday after pulling back 2.3% in the week ended August 18.
The benchmark 10-year Treasury note rose 0.045 percentage points to 4.296%.
The Asian markets ended Monday's session on a mixed note, with the Japanese, Indian, Indonesian, Malaysian and South Korean markets carving modest to moderate gains after the past week's underperformance.
On the other hand, the Chinese, Hong Kong, New Zealand, Singaporean and Australian markets retreated. The negative sentiment may be attributable to the People's Bank of China's decision to leave five-year rate unchanged and reduce the one-year rate by less than expected despite the domestic economic turmoil.
European stocks rebounded strongly and were found solidly higher in late-morning deals. Germany, the region's biggest economy, reported producer price inflation numbers that showed a decline in the annual inflation rate for the first time since late 2020.
Read Next: Wall Street Veteran Who Predicted The 2000 Tech Bubble, 2008 Subprime Crisis, Doubts Fed’s Ability To Sidestep Looming Recession
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