Stock futures wavered Tuesday, whipsawing after an announcement from the Bank of Japan as traders fear a year-end rally may not come to fruition.
Futures tied to the Dow Jones Industrial Average slipped 5 points, or 0.02%, having earlier been down more than 200 points. S&P 500 futures and Nasdaq 100 futures fell 0.17% and 0.42%, respectively.
The Dow on Monday shed more than 162 points, or about 0.5%. The S&P 500 fell 0.9%, and the Nasdaq Composite lost nearly 1.5%. Stocks are on track to end the month and the year in the red, and investors’ hopes for a Santa Claus rally are fading fast.
“There’s still no Santa sighting. Buckle up,” said Louis Navellier, founder of growth investing firm Navellier & Associates. “One would like to think all the bad news is in. There are no more Fed moves until February at the earliest. We’re not gapping down but certainly not clawing back last week’s losses.”
Fears that the Federal Reserve could tip the economy into a recession plagued investors. Last week, the central bank raised its benchmark interest rate by 50 basis points and policymakers indicated the terminal rate could rise as high as 5.1%.
Other central banks in hawkish mode put further pressure on traders, with the European Central Bank raising rates and its outlook for further hikes last week. Overnight on Tuesday, the Bank of Japan moved to widen its cap on the 10-year Japanese government bond yield, catching traders around the world off guard.
“Over 90% of central banks have hiked interest rates this year, making the (mostly) global coordinated effort unprecedented” said Lawrence Gillum, fixed income strategist at LPL Financial. “The good news? We think we’re close to the end of these rate hiking cycles, which could lessen the headwind we’ve seen on global financial markets this year.”
A handful of big companies will report their quarterly results this week ahead of the Christmas holiday. General Mills will report before the bell Tuesday. Nike and FedEx are set to report after the bell.
In economic data, housing starts data for November are due Tuesday morning. This week promises lots of insight into the housing industry. Sales data for existing homes and new homes will be released Wednesday and Friday, respectively.
November’s personal consumption expenditures report, a preferred measure of inflation for the Fed, is due on Friday.
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THIS MORNING’S STOCK NEWS MOVERS:
General Mills (GIS) – General Mills reported better-than-expected profit and revenue for its latest quarter, and it raised its full-year forecast. The food producer was helped by higher prices which were only partially offset by increased input costs. The stock slid 1.3% in premarket action.
STOCK SYMBOL: GIS
Steelcase (SCS) – Steelcase gained 3% in the premarket after the office furniture maker reported better-than-expected quarterly earnings and issued an upbeat profit forecast. Steelcase’s quarterly revenue fell short of Wall Street forecasts as did its revenue forecast, however, but its backlog of orders is 3% higher than it was a year ago.
STOCK SYMBOL: SCS
Lucid (LCID) – Lucid rallied 5.% in premarket trading after the electric vehicle maker raised more than $1.5 billion in a series of stock sales.
STOCK SYMBOL: LCID
Rocket Lab (RKLB) – Rocket Lab fell 1.3% in premarket action after announcing a delay in its first rocket launch from the United States. Rocket Lab cited both poor weather conditions as well as regulatory delays stemming from the processing of documentation by NASA and the Federal Aviation Administration. As a result, Rocket Lab cut its revenue forecast for the fourth quarter.
STOCK SYMBOL: RKLB
The Trade Desk (TTD) – The Trade Desk rose 1.7% in premarket trading after the digital advertising firm’s stock was rated “overweight” in new coverage at Piper Sandler.
STOCK SYMBOL: TTD
Generac (GNRC) – The power equipment maker’s stock slid 1.5% in the premarket after Baird downgraded it to “neutral” from “outperform,” saying Generac’s end markets have not yet reached a bottom and inventory levels are still in the process of returning to normal.
STOCK SYMBOL: GNRC
Stitch Fix (SFIX) – The stock was downgraded to “neutral” from “underweight” at J.P. Morgan Securities, even after an 82% year-to-date decline. The firm says the online clothing styler is struggling with its transition to “Fix + Freestyle” business model. Stitch Fix shares lost 1.6% in premarket trading.
STOCK SYMBOL: SFIX
Beam Therapeutics (BEAM) – The biotech company’s shares rose 2.2% in the premarket after Beam was upgraded to “outperform” from “market perform” at BMO Capital. BMO expects positive announcements from Beam’s partner Verve Therapeutics (VERV) to help drive the stock higher.
STOCK SYMBOL: BEAM
FULL DISCLOSURE:
/u/bigbear0083 has no positions in any stocks mentioned. Reddit, moderators, and the author do not advise making investment decisions based on discussion in these posts. Analysis is not subject to validation and users take action at their own risk.
DISCUSS!
What’s on everyone’s radar for today’s trading day ahead here at r/stocks?
I hope you all have an excellent trading day ahead today on this Tuesday, December 20th, 2022! 🙂
