The negative sentiment that has blanketed the market for much of the week will likely extend into the final session of the trading week. The index futures were modestly lower early Friday. Earnings continue to be mixed, likely creating uncertainty concerning the corporate profit growth outlook. Some negative preannouncements could also weigh down on market mood.
Crude oil continues to climb, questioning the U.S. government’s decision to buy oil in order to replenish the strategic petroleum reserve. The 10-year Treasury yield, though easing from above 5%, has stayed elevated. Traders may also eye the two Fed speeches scheduled for the day to draw cues on near-term Fed funds rate. The central bank officials go into a blackout period, beginning on Saturday, until after the Oct. 31-Nov. 1 rate-setting meeting.
Cues From Thursday’s Trading:
Stocks showed a lack of direction till late afternoon trading on Thursday, as traders reacted to mixed earnings a rise in bond yields, and some mostly positive economic data. Following Fed Chair Jerome Powell’s speech, the averages moved decisively lower and declined steadily through the remainder of the session.
The Nasdaq Composite and the S&P 500 indices closed lower for the third straight session and pulled back to their lowest levels since early June. The blue-chip Dow Industrials Average was down for a second straight session.
Consumer discretionary, real estate, healthcare, industrial, and material stocks paced the declines, while communication services stocks gained modestly, thanks to the strong rally in Netflix, Inc. (NASDAQ:NFLX) shares following its quarterly results.
US Index Performance On Thursday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | -0.96% | 13,186.18 |
| S&P 500 Index | -0.85% | 4,278.00 |
| Dow Industrials | -0.75% | 33,414.17 |
| Russell 2000 | -1.51% | 1,702.70 |
Analyst Color:
Amid the gloom seen in recent sessions, an analyst highlighted two data points that offer a glimmer of hope. Carson Group Chief Market Strategist Ryan Detrick shared two graphics to suggest the worst may be behind.
In the past 10 pre-election years, the S&P 500 Index bottomed around Oct.19, he said. The U.S. is set to hold its general election in November 2024 to elect a new president, with the incumbent Joe Biden and former president Donald Trump widely expected to lock horns, according to opinion polls.
Detrick also noted that the third year of a new president typically sees strength in the first half of the year, then chop into Thanksgiving before rallying strongly into the election year.
Futures Today
Futures Performance On Friday
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.38% |
| S&P 500 | -0.30% |
| Dow | -0.27% |
| R2K | -0.42% |
QQQ) slipped 0.33% to $358.78, according to Benzinga Pro data.
Upcoming Economic Data:
Philadelphia Fed President Patrick Harker will make a public appearance at 9 a.m. EDT. Harker is a member of the Federal Open Market Committee, the rate-setting committee of the Fed.
Cleveland Fed President Loretta Mester, also a member of the FOMC, is scheduled to speak at 12:15 p.m. EDT.
See also: Best Futures Trading Software
Stocks In Focus:
- Knight-Swift Transportation Holdings Inc. (NYSE:KNX) soared over 17.5% in premarket trading following the release of their quarterly results.
- Among the other stocks reacting to earnings are WD-40 Company (NASDAQ:ISRG) (down about 8%).
- SolarEdge Technologies, Inc. (NASDAQ:FSLR), among others.
- Hewlett Packard Enterprise Company (NYSE:HPE) declined over 3.5% on a negative pre-announcement.
- American Express Company (NYSE:SLB) are among the notable companies reporting their quarterly results before the market open.
Commodities, Bonds, Other Global Equity Markets:
Crude oil futures rose 1.36% to $89.57 in early European session on Friday, tacking on to Thursday’s 1.26% rally.
The benchmark 10-year Treasury note fell 0.042 percentage points to 4.946% on Friday.
The Asian markets fell across the board, led by the Australian, New Zealand, and South Korean markets, amid the abounding risks. The chief among them is the fear of further Fed rate hikes in the U.S. The Indonesian market bucked the downtrend with a marginal gain.
Following a string of soft economic data, the People’s Bank of China opted to maintain the one-year and five-year prime lending rates unchanged at 3.45% and 4.20%, respectively, in line with expectations. The rates are at record lows following multiple cuts implemented over the past year to reinvigorate growth.
European stocks trading notably lower in late-morning trading on Friday.
