Futures edge up ahead of jobs data, recession fears loom




  • In US
  • 2022-12-08 12:06:53Z
  • By Reuters
 

(Reuters) - U.S. stock index futures edged up on Thursday ahead of weekly jobless claims data, while fears of an impending recession brought on by an aggressive Federal Reserve kept investors on edge.

The Labor Department's report at 8:30 a.m. ET is likely to show a marginal uptick in the initial claims for state unemployment benefits to 230,000 for the week ended Dec. 3.

Last Friday, data showed U.S. employers hired more workers than expected in November and increased wages, spurring fears that the Federal Reserve might stick to a longer rate-hike cycle as it attempts to tame inflation.

Further, producer price index and the University of Michigan's consumer sentiment survey on Friday and November's consumer price data next week will also be in focus for more clues on the Fed's policy decision on Dec. 14.

Investors see a 93% chance that the U.S. central bank will hike the key benchmark rate by 50 basis points to 4.25%-4.50%, with the rates peaking in May 2023 at 4.93%.

The U.S. central bank has raised its policy rate by 375 basis points this year to a 3.75%-4.00% range from near zero, the fastest rate hikes since the 1980s.

This aggressive approach by the central bank has stoked worries of a recession, with top executives of major U.S. banks and institutions including JPMorgan, BlackRock and Citi forecasting a likely economic downturn in 2023.

The benchmark S&P 500 fell for five consecutive sessions on Wednesday, losing 3.6%, while the Nasdaq has shed 4.5% in four straight sessions.

Inversion of the yield curve between the 2-year and 10-year treasury notes has been widening recently, which is often viewed as an indicator of an impending recession.

"The yield curve is hideously inverted, recession is coming, and stock markets usually bottom only after a recession has started," said Luke Templeman, thematic research analyst at Deutsche Bank.

"But when the outlook is overwhelmingly negative, and no one is positioned for good news, markets can bounce on any unexpected positives that do arise."

At 6:05 a.m. ET, Dow e-minis were up 6 points, or 0.02%, S&P 500 e-minis were up 5.25 points, or 0.13%, and Nasdaq 100 e-minis were up 28 points, or 0.24%.

Most mega-cap technology and growth stocks such as Alphabet Inc, Apple Inc, Microsoft Corp, Tesla Inc and Meta Platforms Inc edged higher in premarket trading.

Salesforce Inc slipped 1.4% after Baird downgraded the software firm's stock to "neutral", while Rent the Runway Inc jumped 15.4% after the clothing rental firm raised its 2022 revenue forecast, signaling strong demand.

(Reporting by Shubham Batra in Bengaluru; Editing by Vinay Dwivedi)

COMMENTS

More Related News

Federal official warns $191 billion in covid unemployment aid may have been misspent
Federal official warns $191 billion in covid unemployment aid may have been misspent

WASHINGTON - The U.S. government may have misspent roughly $191 billion in pandemic unemployment benefits, a top federal watchdog is set to tell Congress on ...

Futures edge lower, Microsoft rises on AI push
Futures edge lower, Microsoft rises on AI push
  • US
  • 2023-02-08 11:29:26Z

Powell said on Tuesday he expects 2023 to be a year of "significant declines in inflation". "The underlying worries about just how high rates will have to...

Asian shares mixed after Wall St gains on Fed chair comments
Asian shares mixed after Wall St gains on Fed chair comments
  • US
  • 2023-02-08 07:52:31Z

Shares were mixed in Asia on Wednesday after stocks rallied on Wall Street following comments by the chair of the Federal Reserve signaling that last week's ...

Central banks are fighting the wrong war - the West
Central banks are fighting the wrong war - the West's money supply is already crashing

Monetary tightening is like pulling a brick across a rough table with a piece of elastic. Central banks tug and tug: nothing happens. They tug again: the...

Asian markets mostly up but rate worries keep optimism in check
Asian markets mostly up but rate worries keep optimism in check

Most Asian markets rose Wednesday but traders remained on edge after Federal Reserve boss Jerome Powell reiterated that inflation was coming down but...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: US