U.S. Stocks May See Further Downside As Treasury Yields Continue To Surge

Following the notable downturn seen over the course of the previous session, stocks are likely to see further downside in early trading on Friday. The major index futures are currently pointing to a lower open for the markets, with the Dow futures down by 225 points.

A continued surge by treasury yields is likely to weigh on Wall Street, as concerns about the outlook for interest rates continue to drive yields higher.

The yield on the benchmark ten-year note is extending the sharp increase seen over the two previous sessions, jumping to a new fourteen-year high.

The downward momentum on Wall Street also reflects a negative reaction to some of the latest earnings news from big-name companies.

Shares of Snap Inc. (SNAP) are moving sharply lower in pre-market trading after the Snapchat parent reported mixed third quarter results and forecast flat revenue for the current quarter.

Credit card giant American Express (AXP) is also seeing significant pre-market weakness despite reporting better than expected third quarter results and raising its full-year guidance.

Shares of Verizon (VZ) may also move to the downside after the telecom giant reported third quarter earnings that beat analyst estimates but weaker than expected wireless subscriber growth.

Nonetheless, overall trading activity may be somewhat subdued, with a lack of major U.S. economic data keeping some traders on the sidelines.

After failing to sustain an early rally, stocks showed a significant downturn over the course of the trading session on Thursday. The major averages pulled back well off their highs of the session and into negative territory.

The major averages all closed in the red, although the Dow posted a relatively modest loss. While the Nasdaq fell 65.66 points or 0.6 percent to 10,614.84 and the S&P 500 slid 29.38 points or 0.8 percent to 3,665.78, the narrower Dow dipped 90.22 points or 0.3 percent to 30,333.59.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan’s Nikkei 225 Index and Hong Kong’s Hang Seng Index both fell by 0.4 percent, although China’s Shanghai Composite Index bucked the downtrend and inched up by 0.1 percent.

Meanwhile, the major European markets have shown notable moves to the downside on the day. While the French CAC 40 Index has tumbled by 1.9 percent, the German DAX Index is down by 1.5 percent and the U.K.’s FTSE 100 Index is down by 1.0 percent.

In commodities trading, crude oil futures are slipping $0.12 to $84.39 a barrel after edging down $0.01 to $84.51 a barrel on Thursday. Meanwhile, after inching up $2.60 to $1,636.80 an ounce in the previous session, gold futures are falling $13.20 to $1,623.60 an ounce.

On the currency front, the U.S. dollar is trading at 151.73 yen versus the 150.15 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $0.9722 compared to yesterday’s $0.9786.

Source: Read Full Article