· Stock futures indicated little change for stocks on Wall Street on Thursday after first opening the overnight session lower. That follows the Dow Jones Industrial Average’s worst day of the year on Wednesday amid a recession signal from the bond market.
Dow futures were up 39 points, as of 12:32 a.m. ET Thursday, implying an opening gain of 35.58 points for the index on Thursday. S&P 500 and Nasdaq futures also pointed to little change at the open on Thursday for the two indexes.
· The Dow Jones fell under considerable selling pressure on Wednesday as traders were rattled by an inversion of the 2s10s yield curve and disappointing earnings from Macy’s. Despite a series of Tweets from President Trump calling for further rate cuts, even the prospect of looser monetary policy was unable to halt the decline. As Thursday trading approaches, investors will look to earnings from Walmart, Alibaba (BABA) and Nvidia (NVDA).
S&P 500 PRICE CHART: DAILY TIME FRAME (JANUARY 2016 – AUGUST 2019) (CHART 3)
To that end, investors will sift through the quarterly report in search of any mention of the US-China trade war and any possible headwinds offered by it. Unsurprisingly, implied volatility is elevated ahead of earnings at 5.5% which offers an implied price range of $17. The area enjoys few technical levels of note aside from the 200-day moving average at $165. Still, a modicum of resistance may reside near the upper bound of the implied price range around $170 while a possible support trendline from January looks to take shape around $155.
· Asian stocks stumbled and oil prices extended a punishing sell-off on Thursday as investors feared an historic drop in long-term U.S. bond yields could portend a recession globally.
Spooked investors stampeded to the safety of sovereign debt and drove yields on 30-year Treasuries US30YT=RR to all-time lows at 1.965%. Yields have now fallen a staggering 60 basis points in just 12 sessions to pay less than three-month debt.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS dropped 0.7% and briefly touched a seven-month low.
· Japan’s Nikkei hit a nine-day low on Thursday as resurgent global recession fears triggered a Wall Street slide and sent the safe-haven yen higher, weighing heavily on the country’s export firms.
The Nikkei share average ended the day down 1.21% at 20,405.65. During the day, it touched 20,184.85, its lowest since Aug. 6.
· European shares edged higher on Thursday, after a brutal sell-off was fueled by global recessionary fears, but investors were hoping central banks would step in to ease monetary policy and soothe markets.
The pan-European STOXX 600 index rose 0.2% by 0710 GMT, gaining some ground after dropping to near six-month lows hit in the previous session.
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