Treasury yields are on track for a stable opening on Wall Street, mirroring the unwavering hot stock market. Investors eagerly await pivotal jobs data and an address from Fed Chair Jerome Powell.
In pre-market trading, U.S. equity futures show an upward tick while the dollar experiences a slight decline. Market volatility indicators find equilibrium, reflecting a collective quest for relief from the unyielding ascent of Treasury bond yields.
On Wednesday, the market eked out modest gains, notably the S&P 500, with a 0.02% uptick. This feat is notable as Treasury yields reached levels unseen since 2007, and oil prices surged to their highest points in nearly a year.
Government Shutdown Concerns Linger Amid House Speaker’s Statement
Concerns regarding a potential government shutdown persist. This is particularly relevant after House Speaker Kevin McCarthy hinted at Republican lawmakers’ reluctance to support a bipartisan Senate spending bill aimed at extending federal funding until mid-November.
Treasury yields continue their upward march, with 10-year notes holding at 4.63%, marking a 60 basis point increase since the month’s commencement. Simultaneously, 2-year notes trade at 5.116%.
The U.S. dollar index, fresh from a decade-high against global peers, experienced a 0.31% dip overnight, settling at 106.341. However, this reversal fails to buoy global stocks. The MSCI World index braces for its longest losing streak in two years, while Asian shares dip to a 10-month low.
Asia’s Stock Finance: Active Trading Amid Looming Golden Week
In China, shares show activity, managing to secure modest gains in the final trading session before the Golden Week holidays.
In Tokyo, the Nikkei 225 saw a significant 1.54% drop. Investors worry about the yen nearing the 150 mark against the U.S. dollar, a level that may trigger intervention from the Bank of Japan.
Global oil prices show slight variations. WTI crude futures for November delivery dipped by 25 cents to $93.43 per barrel, while Brent contracts for the same period slipped 46 cents to $96.09 per barrel.
Key Economic Data and Powell’s Engagement
The spotlight shifts to critical economic data: weekly jobless claims, final second-quarter GDP figures, and comprehensive insights into wage and inflation pressures for the three months concluding in June.
Fed Chair Jerome Powell will host a virtual ‘Town Hall’ meeting with teachers across the country at 4:00 pm Eastern time. It remains uncertain whether he will address the Fed’s current policies directly.
Futures Outlook: Stock Market Prediction for Next 5 Years
In the futures market, the S&P 500 is expected to open with a modest 2-point gain. Meanwhile, the Dow is set for a 20-point increase. The Nasdaq, on the other hand, is projected to open 11 points lower.
The CBOE group’s VIX, a crucial measure of market volatility, witnessed a 4% decrease, resting at 18.19 points.
Global shares are predominantly lower on Thursday, reflecting subdued trading amid mounting concerns about China’s property sector.
The uncertainty surrounding stock market predictions for the next five years persists, given the current volatile economic landscape and various global factors at play.
China Evergrande Concerns: Trading Halt and Chairman’s Status
Trading in shares of heavily indebted Chinese property developer China Evergrande Group was suspended in Hong Kong. Reports suggest the chairman of Evergrande, Hui Ka Yan, was taken away earlier this month and placed under police watch.
Yeap Jun Rong, a market analyst at IG, remarks on the relatively quiet economic calendar for hot stocks. So when will the stock market recover? Sentiments may lean towards a more subdued tone, with reservations about risk-taking revolving around developments in China’s property sector.
