Stock Futures Lower as Bond Yields Break Out

Investors are banking on the Fed to curb bond-buying measures

Sep 28, 2021 at 9:13 AM
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Stock futures are notably lower today, as rising bond yields put pressure on tech shares. The 10-year Treasury yield rose as high as 1.545% overnight, as Wall Street bets on the Fed's promise to curb its emergency bond-buying stimulus amid bubbling inflation. As a result, FAANG stocks are all more than 1% lower in pre-market trading, while futures on the tech-heavy Nasdaq-100 Index (NDX) are off by triple digits. Futures on the Dow Jones Industrial Average (DJI) and S&P 500 Index (SPX) are both well below breakeven as well. 

Also putting pressure on the market is Senate Republicans' decision to block a House-passed bill Monday that would have funded the government and suspended the debt ceiling. If Congress doesn't approve the funding by Friday, it will result in an unprecedented U.S. default.

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

  • Schaeffer's Senior V.P. of Research Todd Salamone revisits the SPX's tri-star doji pattern.
  • Schaeffer's Senior Market Strategist Matthew Timpane takes a look at Tesla stock.
  • Plus, Ford moves on electric vehicle sector; UNFI rises on earnings beat; and Applied Materials gets downgraded.

Futures Chart September 28

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.7 million call contracts traded on Monday, compared to 732,745 put contracts. The single-session equity put/call ratio fell to 0.43, and the 21-day moving average stayed at 0.50.
  2. Ford Motor Company (NYSE:F) stock is up 4.6% ahead of the open, after the automaker accelerated its push into the electric vehicle sector. Ford plans to open a new U.S. assembly plant, three battery factories, and will invest more than $11 billion in the venture. Year-over-year, Ford stock is up 117.5%.
  3. United Natural Foods (NYSE:UNFI) is up 5% before the bell, after the food distributor beat earnings estimates in its fiscal fourth-quarter report. Revenue, meanwhile, was short of Wall Street's forecasts, though sales grew in the year-ago quarter thanks to pandemic-driven customer demand. United Natural Foods stock sports a 137.8% year-to-date lead. 
  4. New Street downgraded Applied Materials (NASDAQ:AMAT) to "neutral" from "buy," citing record valuation and limited upside for the semiconductor equipment manufacturer. In response, Applied Materials stock was last seen 3.2% lower, though is up 145.1% from one year ago.
  5. Today, a trade in goods report is slated for release, as are the S&P Case-Shiller home price and consumer confidence indexes.

OV Buzz Chart Sept 28

European Markets Take a Breather Alongside U.S. Tech Stocks

Asian markets were mixed on Tuesday, after a number of brokerage firms lowered their China gross domestic product (GDP) expectations amid new energy consumption constraints. For one,  Goldman Sachs lowered its estimates to 7.8% from 8.2%. Investors were also eyeing a jump in the U.S. 10-Year Treasury Yield, which hit its highest level since June. Leading the gainers was Hong Kong’s Hang Seng with a 1.2% pop, followed by China’s Shanghai Composite’s 0.5% win. Elsewhere, South Korea’s Kospi dipped 1.1%, while Japan’s Nikkei shed 0.2%.

European markets are lower, as investors digest growth concerns surrounding China, and keep an eye on plummeting tech stocks stateside. Also weighing on sentiment are the results of the German election, after the center-left Social Democratic Party (SPD) earned the majority of the vote by a slim margin, which will now lead to coalition negotiations that could last months. However, new data showed German consumer morale for October unexpectedly improved. At last check, France’s CAC 40 is 1.4% lower, the German DAX is down 1.1%, and London’s FTSE 100 is off 0.2%.

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