Benzinga - by Shanthi Rexaline, Benzinga Editor.
Stocks are set for a lower opening on Tuesday, with concerns about the sustainability of Monday’s modest recovery looming large amid various uncertainties. Minneapolis Federal Reserve President Neel Kashkari, a member of the central bank’s rate-setting committee, hinted at potential future rate hikes, adding to market unease. Additionally, global markets, particularly Asian stocks, displayed widespread weakness, further dampening sentiment. The market’s focus now shifts to upcoming housing market data, a consumer confidence report, and another Fed speech, as it strategizes its next moves.
Cues From Monday's Trading:
In Monday’s trading, the market experienced a reversal of fortunes, breaking a four-day losing streak as bargain hunters disregarded rising bond yields and engaged in buying activities. Despite opening lower, major indices managed to trim early losses. The Nasdaq Composite and the S&P 500 mostly maintained gains throughout the day, while the Dow Industrials spent much of the session below break-even but rallied in the final minutes of trading. Energy and material sectors led the gains, while defensive sectors like consumer staples, utilities, and real estate faced selling pressure.
US Index Performance On Monday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +0.45% | 13,271.32 |
| S&P 500 | +0.40% | 4,337.44 |
| Dow Industrials | +0.13% | 34,006.88 |
| Russell 2,000 | +0.44% | 1,78.24 |
Analyst Color:
Presidential election years are typically good for the stock market since the leading candidates promise everything and anything, which helps to boost consumer confidence, said fund manager Louis Navellier. He expects the earnings environment to steadily improve in the next four quarters and inflation, excluding energy, to continue to ebb.
Due to the anticipation of 4% unemployment resulting from the expanding UAW strikes, Navellier expects that the Fed will cut key interest rates at its December Federal Open Market Committee meeting.
“The bottom line is the U.S. is an oasis and despite an 11-month manufacturing recession, the American consumer continues to propel the U.S. economy, plus surging energy exports,” he said.
Navellier also said the market is entering a strong time of the year, as October has been seasonally strong in the past three decades. Furthermore, November is even seasonally stronger, since Americans tend to be in a good mood as the holiday season commences, he said. “I am expecting a strong finish to the year,” he added.
Futures Today
Futures Performance On Tuesday
| Futures | Performance (+/-) |
| Nasdaq 100 | -0.49% |
| S&P 500 | -0.44% |
| Dow | -0.37% |
| R2K | -0.64% |
In premarket trading on Tuesday, the SPDR S&P 500 ETF Trust (NYSE:SPY) slipped 0.44% to $430.31 and the Invesco QQQ ETF (NASDAQ:QQQ) fell 0.48% to $357.88, according to Benzinga Pro data.
Upcoming Economic Data:
The S&P/Case-Shiller house price index for July is due at 9 a.m. EDT. Economists, on average, expect the 20-city composite house price index to decline by a seasonally unadjusted 0.3% year-over-year following a 1.2% slide in June.
The Federal House Finance Agency’s house price index, also due at 9 a.m. EDT, is expected to rise 0.4% month-over-month, faster than the 0.3% increase in June.
The Commerce Department is scheduled to release its new home sales data for August at 10 a.m. EDT. The consensus estimate calls for new home sales to come in at a seasonally adjusted annual rate of 700,000 units in August, lower than the 714,000 units in July.
The results of the Conference Board’s consumer confidence survey for September are due at 10 a.m. EDT. The headline consumer confidence index is expected to come in at 105.5, down from 106.1 in August.
A couple of regional business activity surveys are also due for the session.
The Treasury will auction 2-year notes at 1 p.m. EDT.
Fed Governor Michelle Bowman is scheduled to speak at 1 p.m. EDT.
Stocks In Focus:
- Tesla, Inc. (NASDAQ:TSLA) fell about 1.50% in premarket trading in reaction to weak China weekly insurance registration data.
- Alibaba Group Holding Ltd. (NYSE:BABA) could be in focus after the company announced plans to spin off its Cainiao logistics unit in a Hong Kong initial public offering.
- Cintas Corp. (NASDAQ:CTAS) and United Natural Foods, Inc. (NYSE:UNFI) are among the companies due to report their quarterly results ahead of the market open.
- Those reporting after the close include Costco Wholesale Corp. (NYSE:COST) and Progress Software Corp. (NASDAQ:PRGS).
Crude oil futures fell 0.69% to $89.06 in early European session on Tuesday following a 0.39% retreat on Monday.
The 10-year Treasury note yield slipped 0.033 percentage points to 4.509%.
The mood across the global markets was somber, with Asian stock retreating across the board, led by the Japanese, Indonesian and Hong Kong markets. Europe is also in a sea of red by late morning trading on Tuesday.
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