Futures on Wall Street Tumble as Investors Eye Fed Decision

The Fed's December policy meeting is set for next week

Deputy Editor
Dec 5, 2022 at 9:12 AM
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Futures on Wall Street are lower on Monday, as investors look ahead to a week jam-packed with economic data. While the Federal Reserve is gearing up for its December policy meeting, expected to take place between Dec. 13 and 14, investors are reacting to Fed Chair Jerome Powell's comments about potentially smaller interest rate hikes starting this month. At last glance, futures on the Dow Jones Industrial Average (DJI) are sporting triple-digit losses, while S&P 500 (SPX) and Nasdaq-100 (NDX) futures are also swimming in red ink.

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

Futures Chart December 052022

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.5 million call contracts and 922,735 put contracts traded on Friday. The single-session equity put/call ratio fell to 0.58, while the 21-day moving average stayed at 0.72.
  2. Starbucks Corporation (NASDAQ:SBUX) is 1.5% lower before the bell, after Deutsche Bank downgraded the coffee chain operator to "hold" from "buy." While SBUX boasts a 24.7% quarter-to-date lead, the firm noted recent outperformance will make additional gains difficult to obtain.
  3. Morgan Stanley upgraded United Airlines Holdings Inc (NASDAQ:UAL) to "overweight" from "equal weight," helping the shares to a 1.2% premarket lead. The analyst in coverage said 2023 could be the airline stock's "goldilocks" year. 
  4. Also according to Morgan Stanley, there's still a "high level of uncertainty" surrounding Silvergate Capital Corp (NYSE:SI) following the collapse of crypto exchange FTX. The analyst downgraded SI to "underweight" from "equal weight," sending shares 3.8% lower ahead of the opening bell, and set to add to an 86.4% year-over-year deficit. 
  5. The final S&P U.S. services PMI, the Institute for Supply Management (ISM) services index, and factory orders are due out today.

buzzdec5

Asian Markets React to Easing Restrictions; European Investors Eye Oil Prices

Asian markets mostly rose as investors observed the Chinese government easing up on some of its strict Covid-19 protocols. China’s Shanghai Composite and the Hong Kong Hang Seng led the charge, adding 1.8% and 4.5%, respectively, as travel and tech stocks soared. Meanwhile, the Nikkei in Japan rose 0.2%, and the South Korean Kospi lost 0.6%.

Some lingering investor doubt over the validity of China’s easing Covid restrictions, however, is putting weight on European markets at midday. Traders also kept an eye on the price of oil, which is surging after the Organization of the Petroleum Exporting Countries and its allies (OPEC+) said it would stick by its decision to lower production. Meanwhile, the euro zone’s purchasing managers’ index (PMI) for November rose to 47.8, but still sat below the 50 mark, signaling a contraction and suggesting the euro zone economy is headed into a mild recession. In response, the French CAC 40 and German DAX were both last seen 0.6% lower, while the London FTSE 100 is up 0.3%.

 

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