Friday September 24th

24-09-2021

U.S. stock futures slide as markets wrap up volatile week

U.S. stock index futures were lower on Friday to wrap up a volatile week on Wall Street. Futures on the Dow Jones Industrial Average were down 167 points, or 0.4%. S&P 500 futures lost 0.5% and Nasdaq 100 futures shed 0.7%. A crackdown on bitcoin by China was hurting market sentiment overnight, especially with technology shares. China’s central bank said all cryptocurrency related activities are illegal. Overseas crypto exchanges providing services in mainland China are also illegal, the PBOC said. Bitcoin dropped 5% and ether lost 9%. Crypto-related stocks fell in premarket trading. Coinbase lost more than 3%. Robinhood shed 2%. Square was off by 1.6%. Nike shares fell 5% in premarket trading after the sneaker giant reported quarterly revenue that missed analysts’ expectations due to softening demand in North America. The company also lowered its fiscal 2022 outlook because of supply chain issues out of Vietnam. This week, the market staged a two-day relief rally beginning on Wednesday after the Federal Reserve signaled no imminent removal of its ultra-easy monetary policy. Investors also bet that the debt crisis of China’s real estate giant Evergrande wouldn’t trigger a ripple effect across global markets. The blue-chip Dow advanced 500 points on Thursday for its best daily performance since July 20. The S&P 500 gained 1.2%, while the tech-heavy Nasdaq Composite rose 1%. The major averages have wiped out the steep losses earlier this week and are on pace to post a winning week heading into Friday. The Dow is up 0.5% week to date, on pace to break a three-week losing streak. The S&P 500 have gained 0.4% this week, and the Nasdaq is up about 0.1%. Investors were still waiting to see if China’s Evergrande, the failing developer at the center of the property crisis in the country, will pay $83 million in interest on a U.S. dollar-denominated bond that was due Thursday. The company so far is staying silent and has 30 days before it technically defaults. Concerns about Evergrande hit global markets to start the week with the Dow shedding more than 600 points. “If Evergrande fails, the exposure outside of China appears limited, and since the government will do whatever it takes to contain it,” said Edward Moya, senior market analyst at Oanda. “If China is successful, global risk appetite may not be dealt that much of a blow.” On Wednesday, the Fed said a tapering of its monthly bond-buying program “may soon be warranted,” but it did not give a specific timeline on when it may begin moderating its purchases. “While we are far from the end of QE and near-zero rates, the tide seems to be beginning to change,” said Anu Gaggar, global investment strategist at Commonwealth Financial Network. “So far, the market had welcomed bad news as good news, but a market reacting to signs of an economy able to stand on its own without the monetary policy crutches is a refreshing change.” Stocks in Asia-Pacific were mixed on Friday, as investors continued to watch developments surrounding China Evergrande Group. The Nikkei 225 in Japan jumped 2.06% to close at 30,248.81, with shares of Fast Retailing and Softbank Group gaining 1.5% and 2.76% respectively. The Topix index gained 2.31% to finish the trading day at 2,090.75. South Korea’s Kospi, on the other hand, closed fractionally lower at 3,125.24. Hong Kong’s Hang Seng index declined 1.45% to close at 23,155.49. Mainland Chinese stocks slipped on the day , with the Shanghai composite down 0.8% to 3,613.07 while the Shenzhen component shed 0.205% to around 14,357.85. Oil prices steadied on Friday near a two-month high of $77.50 a barrel and were headed for a third straight week of gains, supported by global output disruptions and inventory draws. The rally was slightly dampened by China’s first public sale of state crude reserves. Brent crude was up 17 cents, or 0.22%, at $77.42 a barrel, the highest since July 6, and close to their highest since October 2018. U.S. oil was up 5 cents, or 0.1%, at $73.35 a barrel, having closed 1.5% in the previous session, the highest since the start of August. Gold prices edged higher on Friday after falling more than 1% in the previous session, helped by a subdued dollar, although Federal Reserve’s plans on reducing stimulus to the U.S. economy kept the bullion on track for a third straight week of declines. Spot gold rose 0.2% to $1,746.84 per ounce by 0102 GMT, after hitting its lowest since Aug. 11 at $1737.46 on Thursday. Prices were down 0.4% for the week. U.S. gold futures eased 0.1% to $1,747.80. The dollar index languished near a one-week low hit on Thursday, making gold cheaper for those holding other currencies.