Stocks Drop With Futures, Bonds Up as Nerves Fray: Markets Wrap

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U.S. equity futures and Asian stocks fell Friday after a late-day reversal on Wall Street amid shaky company earnings, the prospect of tighter Federal Reserve monetary policy, and U.S.-Russia tension, says an article published in YahooFinance.

A downward slide

S&P 500, Nasdaq 100 and European contracts were in the red. A slide in Japan took Asian shares lower. Bonds rallied, pushing the 10-year U.S. Treasury yield below 1.80%. The yen advanced and a dollar gauge fluctuated.

Gains on Wall Street evaporated into the close of trading Thursday, marooning the tech-heavy Nasdaq 100 in a correction and leaving the broader U.S. market off more than 5% from its January high.

Investors are grappling with the prospect of reduced stimulus in the Fed’s effort to quell high inflation. Company developments also hit sentiment, with Netflix Inc. plunging on a disappointing subscriber outlook. A report that Washington is allowing some Baltic states to send U.S.-made weapons to Ukraine stoked concerns about a standoff with Russia.

Us Crude oil

Oil was lower on a surprise climb in U.S. crude stockpiles. The White House also said it can work to accelerate the release of strategic reserves.

Pandemic-era

Investors’ nerves have frayed as the pandemic-era stimulus that bolstered a range of assets recedes. Markets face a one-two punch of Fed rate hikes and the possible reduction of its $8.8 trillion balance sheet to fight price pressures.

“A lot of people are talking about inflation and that sort of thing, but their portfolios really don’t reflect it,” Richard Bernstein, chief investment officer at Richard Bernstein Advisors LLC, said on Bloomberg Television. “That’s the indecision, the uncertainty that you are seeing now.”

The U.S. company reporting season so far has been uneven, highlighting the risk that it may fail to enliven animal spirits in the stock market. Peloton Interactive Inc., the onetime darling of the stay-at-home trade, plummeted in regular trading on a report of temporary production halts.

“Valuations are finally — after quite a long period of time — going to start to matter, and cash generation and balance sheets are going to be very important as we navigate what is no longer a very easy Fed policy going forward,” Sarah Hunt, portfolio manager at Alpine Woods Capital Investors, said on Bloomberg Television.

Market impact of Omicron

In the latest U.S. data, jobless claims climbed last week to a three-month high, suggesting the omicron variant could be having a bigger impact on the labor market.

Elsewhere, Bitcoin weakened, falling below the $40,000 level.

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Source: Yahoo Finance

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