Friday September 16th

U.S. stock markets index futures fell on Friday as Wall Street headed toward a big losing week, and traders absorbed an ugly earnings warning from FedEx about the global economy. Dow Jones Industrial Average futures dropped by 336 points, or 1.1%. S&P 500 and Nasdaq 100 futures declined 1.2% and 1.3%, respectively. On Thursday, the Dow dropped 173 points, or 0.56%, for its lowest close since July 14. Shares of FedEx plunged 19% after the shipments company withdrew its full-year guidance and said it will implement cost-cutting initiatives to contend with soft global shipment volumes as the global economy “significantly worsened.” Transport stocks are typically seen as a leading economic indicator, so FedEx’s announcement could contribute to broader declines on Friday. “It very much is a bellwether, certainly traditionally,” Robert Teeter of Silvercrest Asset Management said on CNBC’s “Worldwide Exchange.” ”[But] I think one of the things we’ve seen in this pandemic and post-pandemic economy is that different sectors are having different cycles.” “No doubt the news the was not positive, and it certainly is a tell on the importance of margins going forward, which we think is a company by company issue,” Teeter added. The three major averages were on pace to notch their fourth losing week in five as a comeback rally looks increasingly like a bear market bounce. The Dow Jones Industrial Average has declined 3.70% this week, while the S&P 500 is 4.08% lower. The Nasdaq Composite is down 4.62%, headed toward its worst weekly loss since June. The bulk of the losses came on Tuesday following a surprisingly hot reading in August’s consumer price index report, with the Dow losing 1,200 points in its worst decline in two years. The front end of the yield curve continues to make new highs, with the 2-year Treasury yield topping 3.9% on Friday. It is the first time the 2-year has had a yield that high since Nov. 1, 2007. The 1-year Treasury yield, meanwhile, has surged well above 4% and was trading at 4.026% on Friday morning. The 10-year Treasury saw milder moves, deepening the inversion of the yield curve. Shares in the Asia-Pacific fell Friday as investors digest U.S. economic data and China’s industrial production and retail sales figures for August, which beat expectations. The Shenzhen Component in mainland China briefly pared some losses after the data release but then extended losses and closed 2.303% lower at 11,261.50, and the Shanghai Composite was down 2.3% at 3,126.40. Japan’s Nikkei 225 fell 1.11% to 27,567.65, and the Topix index slipped 0.61% to 1,938.56. South Korea’s Kospi shed 0.79% to 2,382.78 and the Kosdaq lost 1.45% to 770.04. Hong Kong’s Hang Seng index was down 0.8% in the final hour of trade. Oil prices were broadly steady on Friday but on track for a weekly decline on fears of sharp interest rate increases expected to curb global economic growth and fuel demand. Brent crude futures were up 52 cents at $91.36 per barrel. U.S. West Texas Intermediate (WTI) crude futures added 29 cents to trade at $85.39 per barrel. Both benchmarks are headed for third consecutive weekly losses, hurt partly by a strong U.S. dollar, which makes oil more expensive for buyers using other currencies. The dollar index held near last week’s high above 110. Gold prices fell for a fourth straight session on Friday to their lowest since April 2020, as expectations of a hefty interest rate hike from the U.S. Federal Reserve next week boosted the dollar and Treasury yields. Bullion is highly sensitive to rising U.S. interest rates, as they increase the opportunity cost of holding the non-yielding metal. Spot gold was down 0.4% at $1,661.30 per ounce. U.S. gold futures fell 0.4% to $1,670.30.