Wall Street is looking to avoid its longest losing streak in a month, with US stock futures staging a comeback on Monday despite the preceding sell-off in global markets.
The S&P 500 capped off a volatile week— its worst since March — with a 2.3 per cent tumble on Friday that saw the index rejoin the Nasdaq Composite in correction territory, defined as a drop of 10 per cent from a peak, and experience a “death cross” — a sign of bearish momentum that occurs when the index’s 50-day moving average falls below its 200-day moving average.
That, continued investor unease about the temporary trade truce between the US and China, and — on Monday — media reports of UK Prime Minister Theresa May’s decision to abort Tuesday’s planned vote for her Brexit deal are weighing on market sentiment.
Futures for the S&P 500 and Dow Jones Industrial Average trimmed earlier declines to sit flat to slightly lower around 8am local time. Those for the Nasdaq Composite turned positive, up 0.2 per cent.
Should the S&P 500 close lower today, it would be the benchmark’s first four-session losing streak in a month.
London’s FTSE 100 was up 0.4 per cent as the pound sold off, but continental European markets were down by between 0.4 per cent and 0.7 per cent. Australia’s S&P/ASX 200 was the worst performer among major Asian markets, which all closed lower by more than 1 per cent, save for a 0.8 per cent decline for the Shanghai Composite.
Government bonds were slightly weaker, with yields edging higher despite the gloomy mood. The yield on the benchmark 10-year US Treasury was up 0.6 basis points to 2.8557 per cent.
Last week, yields drop to their lowest levels in three months, with some particularly chunky moves for shorter-term rates. The movement at the short-end helped widen the so-called yield curve, which — in its most common incarnation — tracks the difference between the two- and 10-year Treasury yields.
Investors were spooked earlier last week by the yield curve falling to its narrowest level since June 2007: a flattening yield curve is often regarded as a possible indicator of an economic slowdown, while an inverted curve (when short-term rates are higher than long ones) is regarded as an indicator of an impending recession.
The dollar was steady, with the DXY index up 0.1 per cent.
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