Monday, November 28, 2022

Equity futures rise lower after Dow and S&P 500 hit a fourth consecutive day of gains

US equities futures fell slightly on Tuesday night after equities prolonged their upswing in the previous session, even as fears of a reverse yield-curved recession raised concerns and investors continued to watch developments in Ukraine unfold.

Forward contracts linked to the Dow Jones Industrial Average fell 27 points or 0.08%. S&P 500 futures fell 0.1% and Nasdaq Composite futures lost 0.1%.

In regular trading, the Dow added 338 points, or 0.97%, and the S&P 500 rose 1.23% – both for their fourth consecutive day of gains. The Nasdaq Composite climbed 1.84%, and is now less than 10% of its record.

“The market has now risen almost 10% in the last 10 days, so we’ve had a pretty incredible boom in a very short time with not a whole lot of news changes, except that we actually have more rate hikes in the market. ” Stephanie Lang, chief investment officer at Homrich Berg, told CNBC.

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“It was a nice ride,” she added. “But I will not get too comfortable for the rest of this year because I think we are going to continue to see a lot of volatility.”

All eyes were on the bond market on Tuesday as US 5-year and 30-year treasury yields reversed on Monday for the first time since 2016. Historically, this inversion was a sign of an impending recession, though it was not a good indicator of when the recession would come. Yet investors were largely shaken by the opportunity.

On Tuesday, the major yield distribution traders watched, that between the 2-year and the 10-year rate came close to reversal, but remained positive.

“The big talk at the moment is that a recession could be on the horizon at any given time,” Lang said. “Usually you will not see a recession for an average of 20 months once a yield curve reverses. Our antennas are on that the recession risk is increasing; that does not necessarily mean there will be one this year, although next year is more a concern for us. “

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CNBC Pro Stocks and Investment Trends:

Investors also continued to monitor the war in Ukraine. Hopes for a potential ceasefire have boosted investor sentiment, after Russian Deputy Defense Minister Alexander Fomin said the country would “drastically” reduce military activity near the Ukrainian capital Kiev.

West Texas Intermediate, the U.S. oil benchmark, briefly fell below $ 100 a barrel before recovering.

Investors will look at economic data scheduled to be released on Wednesday, including economic growth data, home sales data and ADP’s national employment report.

Esther George, president of the Federal Reserve Bank of Kansas City, will speak to the New York Economic Club.

BioNTech and Five Below will report earnings before the opening clock.

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