Stock futures opened slightly higher Thursday evening as investors considered the latest batch of earnings and economic data and continued to contemplate the path forward for monetary policy.
Contracts on the S&P 500 edged up. Earlier, the index narrowly eked out its first positive trading session in three days. Technology stocks led the way higher, and the Nasdaq outperformed.
Traders this week have watched a number of market concerns unfold, with infections related to the Delta variant continuing to climb and the Federal Reserve suggesting in its latest meeting minutes that officials believed the economy might recover enough by the end of the year to warrant a shift in their massive asset purchase program. New weekly jobless claims fell more than expected to a fresh pandemic-era low, signaling a notable step forward in the labor market’s recovery.
Meanwhile, corporate earnings results have come in mostly robustly, though many companies have highlighted supply chain constraints and input price increases as potential ongoing headwinds. Retailers Macy’s (M) and Kohl’s (KSS) each topped second-quarter estimates and delivered upbeat guidance in results posted Thursday morning, aided by a return of more foot traffic and in-person shopping. Deere (DE) and FootLocker (FL) are among the names posted results Friday morning.
“There are a lot of risks out there right now. First of all, the market is looking stretched from a valuation perspective. It’s continued to make record highs, even amidst some of the volatility that we’ve seen,” Megan Horneman, director of portfolio strategy at Verdence Capital Advisors, told Yahoo Finance. “But we do have some economic concerns right now, just from the supply chain perspective, the inflation perspective. These things are probably going to be a problem for us longer than we had anticipated.”
“I think the biggest concern in the equity market would be a taper tantrum,” she added. “Interest rates are so stubbornly low. And I think that markets are just waiting there to see if we get some big move higher in interest rates.”
Others suggested the ultimate market reaction to the Fed’s eventual tapering announcement and commencement will be short-lived.
“Given recent Fedspeak, and the upcoming Jackson Hold Symposium and September FOMC meeting, the timing of the Fed’s reduction of asset purchases has been a widely discussed topic with many of our clients we speak to seemingly convinced that the stock market will have a tantrum once the tapering is announced,” Brian Belski, BMO Capital Markets chief investment strategist, said in a note.
“For our part, we do not think tapering will cause any sort of prolonged market havoc,” he said. “Even when the Fed begins reducing the pace of its bond purchases, the size of its balance sheet will remain very large for quite some time, which should continue to be supportive of U.S. stocks.”
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6:15 p.m. ET Thursday: Stock futures open slightly higher
Here’s where markets were trading Thursday evening:
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S&P 500 futures (ES=F): -1.75 points (-0.04%) at 4,403.25
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Dow futures (YM=F): +22 points (+0.06%) to 35,840.00
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Nasdaq futures (NQ=F): +7.25 points (+0.05%) to 14,935.25
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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Read More:Stock futures edge higher, steadying amid earnings, lingering virus concerns
2021-08-19 22:17:25
