Stocks and Futures Keep Steady, Investors Remain Cautious

17 Sep 2021 · 3rd Party Analysis

Stocks and Futures Keep Steady, Investors Remain Cautious


In Summary

  • World shares were fairly positive on Friday, while US futures traded to the downside
  • Market participants weigh risks to the global economic recovery in September

Global Stocks Moderately Higher, US Futures Move Lower

Global stocks and US index futures were steady in the early Friday hours as investors assess a variety of uncertainties in September that could dent the stellar performance so far in the financial markets.

Stock futures tied to the major averages kept fairly flat to slightly negative in pre-market trading today. Dow Jones Industrial Average futures ticked lower by about 0.2%. S&P500 and Nasdaq futures were also lower ahead of the bell for the last trading day of the week.

Wall Street is heading into Friday’s deals with modest weekly gains. The 30-stock Dow is up less than half a percent since Monday. The broader S&P500 index has added 0.34%, while the Nasdaq Composite is up 0.44% this week, before Friday’s market action.

On Thursday, the major averages traded rather mixed and looking for direction. The Dow slipped 63 points, after dropping nearly 300 points to its session low. The S&P500 fell by less than 0.2%. The tech-focused Nasdaq Composite rose by roughly 0.1%, led higher by gains in shares of Netflix, Amazon, and Microsoft.

Economic Data Brings Mixed Signals

Thursday’s economic data releases highlighted retail sales rose in August, but also people filing for unemployment benefits increased. The mixed signals heightened the uncertainty over the economic outlook as investors largely retreated their bets on stocks. The retail sales for August increased 0.7%, against the Dow Jones forecast of a decline of 0.8%. A separate report indicated weekly jobless claims for the week ended Sept. 11 rose by 20,000 to 332,000, according to the Labor Department.

Besides the mixed signals weighing on the market sentiment, investors are also trying to figure out the Federal Reserve’s next move. The prospects of reduced monetary stimulus, combined with inflation pressures and Covid-19 outbreaks, are further leaning on the positive market outlook.

For September, a month generally defined by weak stock market seasonality, all three major equity gauges are in the red. The blue-chip Dow Jones and S&P500 indexes are down by 1.7%, and 1.1%, respectively. The S&P500 remains 1.6% from its all-time record set earlier in the month. The Nasdaq Composite has dropped moderately by 0.5% so far in September.

Market Sentiment on Friday Wavers

Meanwhile, in Europe, stocks are aiming to notch the second day of gains on Friday. The pan-European Stoxx 600 gained more than half a percent right out of the gate.

All major indexes in the old continent were in positive territory after the opening of the session. Later in the session, however, the major stock gauges gave up early gains and turned lower on the day.

Fresh data released Friday showed inflation in the eurozone stayed high at 3.0% on an annualized basis.

In the currency market, the US dollar surged on Thursday, following the surprisingly strong retail sales data for August. The EUR/USD pair slipped to a two-week low near 1.1750.

Gold tumbled more than 2% to reach a monthly low of $1,750 per troy ounce. The precious metal has recovered a bit on Friday and is currently trading above $1,765, while the euro has gained a bit to trade near $1.1780.

Bitcoin is staging a rebound today following yesterday’s modest loss. The leading cryptocurrency is now changing hands slightly below $48,000, up about 1.5% on the day. Ether, the second-largest token on the crypto board, hovers fairly flat around $3,550 per coin.

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