A surprise move to stem soaring bond yields by the Bank of England helped pare earlier market decline, but U.S. stocks are still looking to extend losses heading into the Wednesday session.
U.S. equity futures moved lower again Wednesday, extending their recent slide into a seventh consecutive session decline and the longest in more than two years, as investors continue to dump risk assets around the world amid concerns over rising interest rates and near-term recession.
Earlier losses were pared sharply, however, after the Bank of England moved to restore stability in financial markets with an emergency intervention aimed at purchasing government bonds in the £2.1 trillion Gilt market amid an historic slump in the pound.
Moody’s Investors Service said the U.K.’s credit rating was at risk from the government’s plans to boost borrowing and cut taxes, while media reports indicated the the government is asking banks not to bet against the pound as it hovers near historic lows against the dollar at 1.0560 even after the unprecedented BoE intervention.
World stocks, in fact, are trading at their lowest levels in more than two years as the dollar — the principal beneficiary of the current risk-off sentiment — continues to print fresh twenty year peaks against its global currency peers.
Stocks Resume Slump, Apple, Biogen, Elon Musk And Hurricane Ian – Five Things To Know
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.45% higher in overnight trading at 114.611 while benchmark 10-year Treasury note yields topped 4% for the first time since 2008.
The dollar’s relentless climb added further downward pressure on oil prices, which were also in the red as traders discounted near-term demand from some of the world’s biggest energy buyers, sending WTI crude closer to $78 a barrel, the lowest in 9 months, during overnight dealing.
The path of Hurricane Ian, however, continues to suggest at least some disruption for drillers in the Gulf of Mexico, although the category 4 storm s now forecast to hit the west coast of Florida later today before sweeping northward across the state towards the Atlantic ocean early Thursday morning.
Market volatility is also back with a vengeance as the Vix index, also known as Wall Street’s ‘Fear Gauge’ jumped 5.6% in overnight trading to a near six-month high of 34.08 points.
In Europe the region-wide Stoxx 600 was marked 1.2% lower in early Frankfurt trading while Britain’s FTSE 100 fell 0.5%.
On Wall Street, futures contracts tied to the S&P 500 are indicating a 20 point opening bell decline, while linked to the Dow Jones Industrial Average are priced for a 75 point pullback. Futures tied to the tech-focused Nasdaq are indicating a 110 point move to the downside.
Biogen (BIIB) – Get Biogen Inc. Report shares were the most notable pre-market moving, rocketing more than 43% higher after the drugmaker and its Japan-based partner Eisai Co Ltd. unveiled better-than-expected results from a late-stage stud of their developing Alzheimer’s treatment.
Apple (AAPL) – Get Apple Inc. Report shares, meanwhile, fell nearly 4% following a report that suggested the world’s biggest tech company will scrap plans to boost iPhone production amid fading consumer demand.
