Credit concerns have also emerged as another significant headwind following disclosures from a few banks on Thursday.
Wall Street could have another down day on Friday, with index futures firmly in the red early Friday. Yet again, there would be little news flow on the economic front due to the ongoing government shutdown. The imminent release of key tech earnings over the next couple of weeks could prompt traders to take a defensive stance.
Fund manager Louis Navellier flagged the shutdown and the China trade uncertainty as the two major issues weighing down on the market. Credit concerns have also emerged as another significant headwind following disclosures from a few banks on Thursday.
As of 1 a.m. ET on Friday, the Nasdaq 100 futures declined 0.51% and the S&P 500 futures fell about 0.48%, and the Russell 2000 futures moved down a steeper 0.64%, while the Dow futures slipped a more modest 0.33%.
The major averages fell moderately on Thursday amid a lack of any significant economic cues. Financials served as a big drag on the market after Zions Bancorp, a regional bank, disclosed a $50 million charge related to two commercial and industrial loans advanced by its California office, and its peer Western Alliance said it has sued Cantor for alleged fraud.
Except for IT stocks, every other sector came under selling pressure amid the ongoing uncertainties.
The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETF) that tracks the S&P 500 Index, and the Invesco QQQ Trust (QQQ) fell 0.68% and 0.37%, respectively, and the SPDR Dow Jones Industrial Average ETF Trust (DIA) ended down 0.68% The iShares Russell 2000 ETF (IWM) slumped 2.11%, as small-caps, which have seen a nice run-up on rate cut hopes, experienced profit-taking amid signals of banking risks.
Among the key earnings reports for the day are American Express (AXP), Comerica (CMA), Fifth Third (FITB), Regions Financial (RF), State Street (STT), Truist (TFC), Huntington Banc (HBAN), SLB (SLB), and Autoliv (ALV).
Navellier said growth and momentum names led from the front amid the market volatility, with the fund manager confident of the trend remaining positive. He views the Federal Reserve’s rate cut and the end of the shutdown as near-term catalysts that can help the market take its next leg up.
After ending Thursday’s session marginally higher, crude oil futures were marginally lower in the Asian session. The gold rally, which saw a let-up on Thursday, has resumed. On Thursday, the 10-year U.S. Treasury note yield broke below the 4% mark for the first time since early April and has fallen further early Friday. Falling bond yields reflect expectations that the central bank will lower rates. The U.S. dollar has weakened for a fourth straight session.
The major Asian markets were swathed in a sea of red, as Wall Street’s dismal performance tempered risk appetite in the regional markets.
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