US stock futures dropped, Wall Street to raise investor concerns about economic downturns and market downturns, exemplified by wild trading at retailer GameStop.
Futures for the S&P 500 fell 0.3% after benchmark shares hit a two-day low since October. The contract for the Nasdaq-100 slipped 1% late Wednesday after earnings from several technology giants, including Apple. Futures linked to the Dow Jones Industrial Average, falling for the longest consecutive five-day losing streak since February, are down 0.1%.
The stumbling in the shares is a strong start to the year which some investors say pushed stock prices beyond reasonable levels by corporate fundamentals. Individual stocks, including GameOutop and AMC Entertainment, have gone on sale amid wild swings,
Fueled by a fight between day traders and hedge-fund professionals.
“There is some over-excitement in the market,” Olaf van Hewel, chief investment officer of Aegon Asset Management in the Netherlands, pointed to the surge in Gametop shares as an example. “It was the bubble zone.”
Individual stocks remained volatile ahead of the bell in New York. GameStop shares rose 28%, with a 135% gain on Wednesday. AMC gained 6.1%, outpacing earlier losses, which boosted Wednesday’s gains by over 300%.
The slow vaccine rollout and Kovid-19 restrictions in major economies have prompted investors to take some money off the table, Mr. van den Heuvel said. He said that Aegon would potentially have a chance to see Selloff when the market was compromised.
Technology stock dropped ahead of the bell in New York. Apple’s shares fell 2.9% after the iPhone manufacturer gave the most profitable report on record in three months, but did not provide specific revenue guidance for the current quarter.
Tesla has lost 6.1% after the electric-vehicle manufacturer – whose shares have risen in recent months – posted its first full-year profit but missed Wall Street expectations. Facebook,
Which posted record net income but warned that uncertainty from regulatory scrutiny and ad-targeting limits could create headwinds, premarket trading fell 0.8%.
According to TradeVibe, in a sign of increased risk aversion, yields on the 10-year US Treasury note fell below 1% from January 1 before climbing to 1.008% for the first time..
Bond yields fall as prices rise. Falling yields are often an indicator that investors see the economic outlook weakening.
The dollar strengthened against various currencies including the Australian dollar and Korean. The WSJ Dollar Index, which measures the greenback against a basket of other currencies, rose 0.2%.
American Airlines and MasterCard are about to publish the results before the market opens. Investors will also parse unemployed claims data – due to be published at 8:30 am ET and are expected to show that the number of workers benefiting has dropped over the past week – for fresh clues as to how the economy is epidemic. Is facing
The Federal Reserve on Wednesday maintained its easy-money policies, saying business activity has softened with the resurgence of Kovid-19 cases.
Mary Nichola, a portfolio manager at Pinebridge Investments, said, “The removal of fiscal stimulus at any point of time could lead to a recovery in recovery.”
Selling in US stocks rose overseas. Pan-continental stocks Europe 600 fell 0.7% compared to shares of oil and gas and financial companies.
Shares in a number of heavily traded European stocks shot on Wednesday, when there was less spread outside the US, came under pressure. Commercial real estate firm Unibel-Rodamco-Westfield lost 2.4% and German pharmaceutical manufacturer Avotech lost 4%.
Remy Olu-Peeton, a fund manager at Schroders, said, “Traders swapped online tips during day trading.” He added that the possibility of volatility prompted some professional investors, including those caught with small positions to take a loss, to take money off the table, weighing on broader markets.
“You’ll see more violent shortcomings,” Ms. Olu-Peeton said. “There are parts of the market that are in a bubble.”
The insurer said after Prudential fell 7.5%, among other individual movers, it said it was the weight of an equity offering and would set aside its Jackson National arm in the US Diageo rose 4.8%, as analysts reported the wine maker’s northern Happy first-half sales in the US. .
Markets retreated widely in Asia. Hong Kong’s HangSeng dropped 2.6%, Shanghai Composite Index fell 1.9% and Japan’s Nikkei 225 fell 1.5%. Container-shipping giant Cosco Shipping led losses in mainland China, slipping 10%.
In a sign of a setback in Chinese markets, the money-market rate continued to rise. According to FactSet, the one-week Shanghai Interbank grew at a rate of 0.012 percent to 2.981%, the highest since 2015.
Lending costs have risen in recent times as the People’s Bank of China unexpectedly withdrew funds from the financial system. Earlier this week, a leading commercial newspaper also published a comment by Ma Jun, an advisor at the central bank, who warned of the emergence of an asset bubble due to monetary policy.
Asia market strategist Tai Hui, head of JP Morgan Asset Management, said the new pocket of coronovirus outbreaks in China has also influenced investor sentiment.
write to Joe Wallace on Joe Velas @ wsj.com and Chong Koh Ping at [email protected]
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