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Stock futures fell Tuesday morning, reversing directions after the Bank of Japan announced to widen its yield goal range.
Futures tied to the Dow Jones Industrial Average lost 236 points, or 0.72%. S&P 500 futures and Nasdaq 100 futures fell 0.86% and 1.05%, respectively.
During regular trading on Monday, the Dow shed greater than 162 points, or about 0.5%. The S&P 500 fell 0.9%, and the Nasdaq Composite lost nearly 1.5%. Stocks are heading in the right direction to finish the month and the 12 months within the red, and investors’ hopes for a Santa Claus rally are fading fast.
“There’s still no Santa sighting. Buckle up,” said Louis Navellier, founding father of growth investing firm Navellier & Associates. “One would love to think all of the bad news is in. There aren’t any more Fed moves until February on the earliest. We’re not gapping down but definitely not clawing back last week’s losses.”
Fears that the Federal Reserve could tip the economy right into a recession plagued investors. Last week, the central bank raised its benchmark rate of interest by 50 basis points and policymakers indicated the terminal rate could rise as high as 5.1%.
Other central banks in hawkish mode put further pressure on traders, with the European Central Bank raising rates and its outlook for further hikes last week.
“Over 90% of central banks have hiked rates of interest this 12 months, making the (mostly) global coordinated effort unprecedented” said Lawrence Gillum, fixed income strategist at LPL Financial. “The excellent news? We expect we’re near the top of those rate climbing cycles, which could lessen the headwind we have seen on global financial markets this 12 months.”
A handful of huge firms will report their quarterly results this week ahead of the Christmas holiday. General Mills will report before the bell Tuesday. Nike and FedEx are set to report after the bell.
In economic data, housing starts data for November are due Tuesday morning. This week guarantees numerous insight into the housing industry. Sales data for existing homes and latest homes will probably be released Wednesday and Friday, respectively.
November’s personal consumption expenditures report, a preferred measure of inflation for the Fed, is due on Friday.
