Dow Futures Drop as Yield Curve Woes Return

The 10-year Treasury yield slumped further below 2-year Treasury yield

Managing Editor
Aug 28, 2019 at 9:21 AM
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Dow Jones Industrial Average (DJI) futures are pointing to a sharp drop out of the gate for the blue-chip index this morning, as another yield-curve inversion stokes fears of a possible recession. Investors are nervously eyeing the yield spread between the 10-year and 2-year Treasury notes, which is near levels not seen since 2007. Plus, the 30-year note fell to a record low overnight, fueling concerns about slower U.S. growth. Oil prices continue to show signs of life, though, with October-dated crude futures up 1.4% at $55.71 per barrel. 

Continue reading for more on today's market, including: 

  • Schaeffer's Senior Quantitative Analyst Rocky White breaks down what happens to the S&P after a four-week losing streak.
  • A court ruling sent Mallinckrodt stock to new lows.
  • Citi just trimmed its view on Tech Data stock.
  • Plus, Tiffany drops after earnings; Deutsche says buy JetBlue; and Autodesk sinks on trimmed outlook.

Stock Futures Chart Aug 28

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw 844,488 call contracts traded on Tuesday, compared to 537,569 put contracts. The single-session equity put/call ratio climbed to 0.64, while the 21-day moving average remained at 0.73.
  2. Tiffany & Co. (NYSE:TIF) stock is down 4.9% in electronic trading, after the luxury retailer reported second-quarter revenue and same-store sales that missed their marks. Quarterly earnings exceeded analyst expectations, though, while strong growth in China helped Tiffany maintain its full-year outlook. As of yesterday's close at $82.67, TIF was up 2.7% year-to-date.
  3. JetBlue Airways Corporation (NASDAQ:JBLU) stock is up 0.6% ahead of the bell, after Deutsche Bank named the airliner a "catalyst call." The brokerage firm glowed about the company's balance sheet, and sees its 14% deficit in August as creating an attractive entry point.
  4. The shares of Autodesk, Inc. (NASDAQ:ADSK) are down 12% in electronic trading, after the software maker reported second-quarter earnings and revenue above expectations, but lowered its full-year guidance and sales forecast. Autodesk cited uncertain economic conditions as reason for the trimmed outlook, and the news has been met with eight price-target cuts, the lowest coming from Wedbush to $149 from $164.
  5. Weekly crude inventories data are due, and San Francisco Fed President Mary Daly will deliver a speech after markets close. Earnings reports from Box (BOX), Coty (COTY), Five Below (FIVE), Guess? (GES), H&R Block (HRB), Nutanix (NTNX), Ollie's Bargain Outlet (OLLI), PVH (PVH), and Williams-Sonoma (WSM) are slated for release. 

stock market news aug 28

Yield Curve Weighs on Asian Markets; Tech Stocks Drag Europe

It was a mixed finish in Asia, with an inverted yield curve in the U.S. on investors' radar. South Korea's Kospi outperformed its regional peers -- even after Japan removed the country from a list of preferred trading partners -- adding 0.9% on a big rally in Samsung Pharmaceutical stock. Japan's Nikkei also finished higher, adding 0.1% as telecommunications name NTT popped. Elsewhere, China's Shanghai Composite fell 0.3%, and Hong Kong's Hang Seng gave back 0.2%.

European markets are in negative territory at midday, with technology among the worst-hit sectors. The German DAX is down the most, off 1.1% as the 10-year bund yield neared a record low, while the French CAC 40 is 1% lower. Meanwhile, London's FTSE 100 is down 0.3%, as the pound weakens against the U.S. dollar on news U.K. Prime Minister Boris Johnson will delay the reopening of parliament until Oct. 14, which could increase the chance of a no-deal Brexit.

 

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