U.S. Stock Market Future Indications, by MarketWatch - August 25, 2016
U.S. stock futures dropped on Thursday, with investors staying cautious as the closely watched summit of central bankers in Jackson Hole got ready to kick off.
Federal Reserve Chairwoman Janet Yellen isn’t speaking at the meeting until Friday, but financial markets have been lackluster all week in anticipation of what she might say about the path of interest rates.
On Thursday, futures for the Dow Jones Industrial Average YMU6, -0.22% dropped 42 points, or 0.2%, to 18,430, while those for the S&P 500 index ESU6, -0.21% fell 4.65 points, or 0.2%, to 2,170.25. Futures for the Nasdaq-100 index NQU6, -0.24% lost 12.50 points, or 0.3%, to 4,773.50,
The indicated losses come after a downbeat trading day on Wednesday, when the S&P 500 SPX, -0.52% and the Dow average finished at their lowest levels since early August. The selloff came as health care shares dived following outrage over a price hike for Mylan Inc.’s MYL, -5.41% EpiPens, which are widely used to treat anaphylactic shock.
Shares of Mylan were set to rebound a little on Thursday, rising 0.4% in thin premarket trade.
All eyes on Jackson Hole: But the main event on Thursday is the first day of the economic symposium hosted by the Kansas City Fed in Jackson Hole, Wyo. Central bank boss Yellen will speak on Friday at 10.a.m. Eastern Time, and markets are likely to remain becalmed until then, analysts said.
“Markets are incredibly quiet this August (in sharp contrast to last year), so investors are latching on to anything they can, which gives this meeting a lot more attention than it probably deserves,” said Neil Wilson, markets analyst at ETX Capital in a note.
“The big question on the table is whether the Fed is ready to raise rates in September... We can probably expect Yellen to signal the Fed’s confidence about the U.S. economy and this could drive up expectations it will pull the trigger in September, potentially pushing up [the dollar] and hitting gold in the short-term,” he added.
The ICE Dollar Index DXY, -0.15% was down 0.2% on Thursday at 94.618, while goldGCZ6, -0.19% traded marginally lower at $1,329.40.
According to the CME FedWatch tool, markets are currently pricing in a 21% probability of a September rate increase.
Eight central bankers, including Fed governor Lael Brainard and New York Fed President William Dudley, are expected to meet activist group Campaign for Popular Democracy’s Fed Up Campaign to answer questions about monetary policy on Thursday.
Economic news: A trio of data hits the market at 8:30 a.m. Eastern: weekly jobless claims, durable goods orders and core capital goods orders.
Economics polled by MarketWatch expect 264,000 people to have applied for unemployment benefits last week, up 2,000 from the week before.
Durable goods are seen rising 3.6% in July.
At 9:45 a.m. Eastern, a preliminary reading on the services purchasing managers’ index for August is due from Markit.