Futures of U.S. stock markets fell on Friday amid fears over the delta variant of the coronavirus, the impending reduction in Federal Reserve bond purchases and China’s restrictions on its domestic economy.
What is happening
-
Futures above the Dow Jones YM00 industrial average,
-0.39%
fell 164 points;
-
Futures on the S&P 500 ES00,
-0.37%
lost 0.5%;
-
Futures on the Nasdaq 100 NQ00,
-0.19%
fell 0.3%.
On Thursday, the main markets ended mixed, with the S&P 500 SPX,
and Nasdaq Composite COMP,
recording small gains, while the Russell 2000 RUT of small capitalization
finished 1.2% lower.
What is driving the markets
With no U.S. economic data and few corporate press releases, traders will stop focusing on developments earlier this week.
“The ten key years of performance of TMUBMUSD10Y,
they barely changed as the stocks were reversed – suggesting that the measure was more about top-down risks for growth construction, specifically around the delta variant, after several weeks in what bottom-up corporate news has supported, ”said Ian Williams, a strategist at British broker Peel Hunt.
Michael Hartnett, chief investment strategist at Bank of America, says the market is acting recessionally.
The US performance curve, measured by the gap between the 5- TMUBMUSD05Y,
and TMUBMUSD30Y 30 years,
good, is in a minimum of one year; world stocks without American technology have not changed in the last eight months; emerging market equities are negative this year; stocks of small capitalizations are being broken; a range of commodities has fallen in double-digit percentages from the highs; and the top four sectors of the S&P 500 in the second half of the year are utilities, health care, REITs, and commodities.
“I spent $ 32 trillion and all I got was that awful W-shaped recovery,” he joked.
The Hang Seng HSI,
suffered another tough session, with a 1.8% drop in Hong Kong, as the index is now 19% below February highs due to continued regulatory repression in China. On Friday, China passed a strict data privacy law that will go into effect in November.
The VIX VIX,
the stock market volatility jumped early and the DXY dollar,
reached a new maximum of nine months.