A trader works on the floor of the New York Stock Exchange (NYSE) on November 8, 2021.
Brendan McDermid | Reuters
US stock futures fell in overnight trading on Thursday as investors gear up for a shorter trading day A new variant found in South Africa fears renewed covid,
Futures for the Dow Jones Industrial Average fell more than 400 points, while the S&P 500 and Nasdaq 100 were both in negative territory.
Markets were closed Thursday for Thanksgiving, so stocks are coming off a modest gain on Wednesday, which eased week’s losses for the S&P 500 and Nasdaq Composite.
Treasury yields have climbed this week, putting pressure on high-growth stocks. The Nasdaq is down 1.3% for the week, while the S&P 500 is down less than 0.1% and the Dow is up nearly 0.6%.
The last weeks of the year are usually a strong period for the market, with the so-called Santa Claus rally usually making it a pleasant holiday for Wall Street. The S&P 500 is up 25% year to date.
“I think we’re probably in a market that’s up its alley for the next few weeks until we get to the next [Fed’s Federal Open Market Committee] meeting,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management. “I think spending is going to be strong at the consumer level … I think when we get the November jobs report in mid-December. Well, I think it would be favorable.”
“I think the most likely to be a recalculation, a rethink, or a market revaluation is when the FOMC makes its announcements. [Dec. 15], By then, we’ll have a lot more to do than we already know,” Ma said.
Friday also marks the unofficial start of the holiday shopping season, as investors will seek insights from Black Friday to determine the mood of the US consumer.
Retail stocks have seen dramatic moves in both directions this earnings season. On Wednesday, shares of Gap and Nordstrom fell more than 20%, but shares of Kohl’s declined. jumped more than 10% After recording strong sales growth a week ago.
Retail executives spoke during the quarter about how they are managing supply chain issues and inflation. It also remains to be seen whether the discussion on supply chain issues caused consumers to start their holiday shopping early, potentially denting fourth-quarter sales.
“I wouldn’t be surprised if this was dynamic around the holiday season,” said Sarah Henry, a portfolio manager at Logan Capital Management. He said his firm was looking for companies with a long-term strategic advantage rather than trying to bet on the best sales results over the holidays.
Wednesday also saw several strong economic reports, with personal income and consumer spending higher than expected for October and Initial jobless claims hit their lowest level since 1969, However, the core PCE, the Fed’s preferred inflation gauge, remained high at 4.1%,
There is no major economic release scheduled for Friday. The stock market will be closed at 1 PM ET on Friday due to the holiday weekend.