Stock Futures Tumble as British Pound Hits Record Lows

The 2-year Treasury yield is surging once more

Deputy Editor
Sep 26, 2022 at 9:05 AM
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Wall Street looks poised to open lower once again, as stock futures sit deep in the red to kick off a new week. Foreign currency is shaking the market, after the British pound hit a record low against the surging U.S. dollar. The Federal Reserve's rate hikes, along with U.K. tax cuts, resulted in the euro hitting its lowest level versus the dollar in two decades. In addition, the 2-year Treasury yield is on the rise once again, topping 4.29% earlier on Monday.

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

  • How the Fed's hawkishness weighed on markets last week. 
  • The pentagon awarded this defense company a massive contract.
  • Plus, Monday's biggest analyst calls; and Macao is ready for tourist groups.

Futures Chart September 262022

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.47 million call contracts and 1.5 million put contracts traded on Friday. The single-session equity put/call ratio rose to 1.02, while the 21-day moving average stayed at 0.67.
  2. Raymond James upgraded Planet Fitness Inc (NYSE:PLNT) to "strong buy" from "market perform," saying the company has no interest rate risk and little near-term debt maturities, making it a particularly recession-resistant unit. The firm also noted that PLNT's current valuation is below its recent historical average. Last seen 4.2% higher before the bell, Planet Fitness stock is still 38.3% lower in 2022.
  3. LYFT Inc (NASDAQ:LYFT) is 3.7% lower premarket, after UBS downgraded the ride-hailing concern to "neutral" from "buy." The analyst cited its driver survey, which indicated that drivers prefer Uber over Lyft. Coming into today, LYFT was already down nearly 75% year-over-year.
  4. Shares of Las Vegas Sands Corp. (NYSE:LVS) are getting a boost today, after Macao revealed it plans to permit tour groups from mainland China by as early as November. LVS is 6.8% higher ahead of the open and looking to challenge its 5.8% year-to-date deficit.  
  5. The week kicks off with the Chicago Fed national activity index.

OV Buzz Chart Sept 26

British Pound's Plummet, Bond Yield Surge Weigh on Major Bourses 

Asian stocks are still in a slump as global sentiment remains sour. The Bank of Korea (BoK) predicted that the U.S. Federal Reserve would hike interest rates by another 75 basis points during its next meeting, putting even more weight on equities. Meanwhile, the People’s Bank of China said it would lift the risk reserve requirement on foreign currency exchange to 20% from 0%, starting Wednesday, increasing the price of the yuan. In response, the Nikkei in Japan fell 2.7%, the Hong Kong Hang Seng lost 0.4%, the Shanghai Composite in China shed 1.2%, and the South Korean Kospi lost 3%.

In Europe, stocks are also showing more weakness, with the French CAC last seen down 0.1%, the London FTSE 100 off 0.6%, and the German DAX 0.07% lower. Investors are monitoring the British pound’s plummet to a record low, dropping 4% to $1.0382 in reaction to the U.K. government’s announcement that it would soon implement tax cuts and investment incentives to boost the sluggish economy. Meanwhile, British bond yield are surging, set for their biggest one-month rise on record.

 

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