U.S. stock futures dropped as investors worried that the Fed’s tapering could have far-reaching implications on markets.
Some investors believe the Federal Reserve’s near-zero interest rates have created a so-called “bubble” in asset prices. If so, the question then becomes: can the markets continue moving higher if the Fed takes the bunch bowl (monetary stimulus) away?
Right now, markets expect the Fed to taper its $120 billion bond purchase program faster than originally anticipated. Indeed, the stimulus could end as soon as spring with rate hikes occurring later in the year.
Inflation has grown considerably over the last year with consumer prices jumping at the fastest rate since June 1982 and wholesale prices growing at the fastest rate every recorded. Indeed, wholesale prices jumped 9.6% from a year ago in November, according to a new report released today.
However, growth concerns are mounting with global supply chain issues and pandemic controls. In this environment, it is unclear whether the markets could handle a rate hike.
| Chg. | |||
| DOW Futures | -106 | ||
| S&P 500 Futures | -29 | ||
| Nasdaq Futures | -178 |
U.S. Dollar and Treasuries
The yield on the 10-year Treasury rose two basis points. The dollar remained stable against a basket of major currencies.
| Price | Chg. | Chg. % | |
| U.S. Dollar Index (DXY): | 96.18 | -0.14 | -0.14% |
| Yield | Change | Previous close | |
| U.S. 1 Year Treasury Bill | 0.250% | 0.003 | 0.248% |
| U.S. 5 Year Treasury Note | 1.229% | 0.021 | 1.208% |
| U.S. 10 Year Treasury Note | 1.438% | 0.024 | #N/A |
Stocks To Watch
Shares of chip manufacturer NVidia dropped with the markets. The stock lost 6.75% on Monday, as global growth concerns impact demand.
Tesla dropped in premarket trading after losing 5% on Monday. The stocks sold due to Musk selling more shares. The Tesla CEO also said that the company would let users buy merch with Dogecoin.
Meme stocks like AMC and GameStop fell in premarket trading, after huge Monday losses. The drop was due to insider selling as AMC CEO continued to dump shares. GME fell almost 14% on Monday and AMC dell more than 15%.
| Symbol | Company Name | Price | Chg. % | Volume |
| NVDA | NVIDIA Corp. | $278.78 | -1.00% | 491.12K |
| TSLA | Tesla Inc. | $950.70 | -1.63% | 407.36K |
| AMC | AMC Entertainment Holdings | $21.81 | -6.20% | 964.7K |
| GME | GameStop Corp. | $132.83 | -2.83% | 57.8K |
Commodities To Watch
Oil was stable even as Omicron fears threatened demand. Gold was slightly down ahead of the Fed meeting.
| Resource | Price | Chg. % |
| WTI Crude Oil | $71.24 | -0.07% |
| Brent Crude Oil | $74.33 | -0.08% |
| Natural Gas | $3.74 | -1.40% |
| Gold | $1,784.70 | -0.20% |
| Silver | $22.14 | -0.84% |
| Copper | $4.30 | 0.36% |
Crypto
Crypto continues to sell off amid news that stablecoin company Tether faces another lawsuit. The global crypto market cap is $2.18T, a 2.51% decrease over the last day. Bitcoin’s dominance is currently 41.41%, an increase of 0.19% over the same period.
| Currency | Symbol | Price | Chg. % | Market Cap. |
| Bitcoin | BTC | $47,644.15 | -2.09% | 900.51b |
| Etherium | ETH | $3,832.23 | -4.03% | 453.58b |
| Binance coin | BNB | $525.55 | -4.19% | 79.01b |
| Solana | SOL | $159.74 | -4.09% | 49.17b |
| Cardano | ADA | $ 1.254 | -3.46% | 39.02b |
