Stock Futures Moody on Downgraded Banks

The banking sector pullback is dragging sentiment on the Street

Deputy Editor
Aug 8, 2023 at 9:03 AM
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Stock futures are lower this morning, after Moody's cut its credit rating on multiple U.S. banks. While smaller banks are suffering the most following the downgrade, major financial firms like Goldman Sachs (GS) and JPMorgan Chase (JPM) are pulling back as well. At last check, Dow Jones Industrial Average (DJI) and Nasdaq-100 Index (NDX) futures are down triple digits, and futures on the S&P 500 Index (SPX) are substantially lower as well.

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

  • Schaeffer's Senior V.P. of Research Todd Salamone adds some context for the SPX's latest pullback.
  • Dwindling vaccine sales dent biotech stock.
  • Plus, breaking down Moody's downgrade; bear notes for home improvement retailers; and Chegg's quarterly report.

Futures Chart August 82023

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.5 million call and 1 million put contracts exchanged on Monday. The single-session equity put/call ratio fell to 0.65, while the 21-day moving average stayed at 0.65.
  2. JPMorgan Chase & Co (NYSE:JPM) stock is 1.3% lower in electronic trading, after Moody's downgrade. The brokerage firm said higher interest rates and asset-liability management risks (ALM) will continue to act as headwinds for banks in the U.S. The SPDR S&P Regional banking ETF (KRE) is adding to its 23.4% year-over-year loss, while JPM sports a 35.4% gain in that same time frame.
  3. Lowe's Companies Inc (NYSE:Low) stock was last seen down 1.5% before the bell, after Telsey Advisory Group downgraded the home improvement retailer to "market perform." The analyst also cut its rating on sector-peer Home Depot (HD), citing cautious consumer spending and lackluster housing trends. Over the last 12 months, LOW is 12.2% lower.
  4. Chegg Inc (NYSE:CHGG) is 20% higher in premarketing trading, looking to cut into its 60.3% year-to-date deficit on better-than-expected second-quarter revenue. The educational technology firm reported earnings of 28 cents per share on revenue of $183 million, and outlined plans for more AI-focused strategies to be integrated.  
  5. The U.S. trade balance is due out today, as well as wholesale inventories and the National Federation of Independent Business (NFIB) optimism index.

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Sour Sentiment Dragging Overseas Stocks

Asian markets were mostly lower on Tuesday, aside from Japan’s Nikkei, which added 0.4% for its third-straight win. China’s trade data weighed, after exports fell 14.5% year-over-year, while imports dropped 12.4%. Plus, Japan posted a steeper-than-expected 4.2% drop in household spending in May – its fourth-straight monthly decline. Hong Kong’s Hang Seng led the losers with a 1.8% deficit, while China’s Shanghai Composite and the South Korean Kospi both shed 0.3%.

European bourses are lower today as well, amid news that Italy is posing a 40% windfall tax on banking profits. London’s FTSE 100 is off 0.7% at last check, while the French CAC 40 sheds 1.1%, and the German DAX loses 1.3%.

 

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