Trish’s Market Notes: Futures Tank As Fed Hints At Fewer Bond Purchases

Global markets fell sharply in premarket trading Thursday.

The Federal Reserve Open Market Committee (FOMC) members stressed the need for “patience” and for continued monetary stimulus in the form of low interest rates, the Fed minutes show. They also reiterated their view that the current inflation trend is “transitory.”

However, they did discuss reducing asset purchases. (The Fed has been purchasing assets like treasuries and corporate bonds to the tune of $120 billion a month.)

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This has likely spooked investors who worry about the looming corporate bond bubble. Paired with concerns over slow growth and some uneasiness about the new Delta variant, it’s easy to see why the markets are in the red.

Gold rallied, trading above the $1800 level at $1816.70 an ounce, as investors sought a safe haven.

Equities

U.S. stock indices fell sharply on growth concerns and on Fed’s “taper talk.”

  • S&P 500 futures: 4,293.00, -1.30%
  • Nasdaq futures: 14,617.50, -1.25%
  • DOW futures: 34,121.00, -1.35%

U.S. Dollar and Treasuries

Treasury yields dropped as investors escaped into “safer” investment vehicles. The dollar dropped against a basket of leading currencies.

  • U.S. Dollar Index (DXY): 92.46, -0.20%
  • 10-year Treasury yield: 1.321%
  • 2-year Treasury yield: 0.220%

Stocks To Watch

Stocks of an African/Caribbean American bank Carver Bancorp surged in premarket trading, on no apparent company news. The surge is likely a result of retail investors seeing an opportunity for a short squeeze.  

A wireless industry distributor and service provider TESSCO reported encouraging earnings results. The company expects Q1 revenues of $105 million, up 9% year over year. Q1 sales grew 37% year over year.

Investment bank H.C. Wainwright upgraded Aerpio Pharmaceuticals stock to buy.

  • ARPO Aerpio Pharmaceuticals $2.56, +49.71%, 4.20M (volume)
  • CARV Carver Bancorp Inc $15.30, +44.61%, 832.70K (volume)
  • TESS TESSCO $7.440, +29.17%, 1.26M (volume)

Commodities To Watch

Oil continues to drop in premarket trading after a significant drop in Wednesday’s trading. Investors continue to be concerned that OPEC+ infighting might make oil producers pursue their own individual production policies, undercutting each other in the process. This could result in oil flooding the market. Gold strengthened.

  • WTI crude: $71.71, -0.68%
  • Brent crude: $73.07, -0.49%
  • Gold: $1,817.40, +0.85%

Crypto

The global crypto market cap decreased by -6.37% in the last 24 hours. China expanded its trial use of the Digital Yuan to 10 million eligible users.

  • BTC: $32,326.79, -7.31%
  • ETH: $2,139.79, -10.51%
  • XRP: $0.6153, -8.24%
  • DOGE: $0.2116, -10.08%
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