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Oct 8, 2018

Before the bell: futures drop, following a sharp fall seen in markets overseas I CNBC.


Alexandra Gibbs


U.S. stock index futures fell deep into the red ahead of Monday's open.
Around 6:00 a.m. ET, Dow futures fell 77 points, indicating a lower open of -45.05 points. Futures on the S&P 500 were indicating a slightly downbeat open of -1.77 points, while Nasdaq futures signaled a negative open of -13.76 points.

Michael Nagle | Bloomberg | Getty Images
As another trading week kicks off, global equity markets are seeing red, as investors worry over rising U.S. interest rates and economic news out of different regions. Wall Street may however see some respite on Monday, as bond markets are closed in light of Columbus Day. On Friday, the benchmark 10-year Treasury yield hit its highest level seen since 2011.
This comes amid fresh economic data, with Friday's jobs report showing another month of rising wages and a sharp revision higher to August's nonfarm payrolls. In September, the unemployment rate in the U.S. fell to a level not seen in close to 50 years, while job creation for September hit its lowest in a year, with the economy only adding 134,000 jobs, much lower than what was expected by analysts.
On Monday however, there is little economic or corporate data for investors to chew on.
In markets overseas, Chinese stocks saw declines after the People's Bank of China (PBOC) announced measures on Sunday to cut the amount of cash that banks have to hold as reserves, with the reserve requirement ratios set to be slashed by 100 basis points, effective from next week. The news comes as the nation continues to battle with the U.S. over a tit-for-tat trade war, and is the fourth time the PBOC has slashed its reserve requirement ratio (RRR) in 2018.

Are we entering the beginning of a bear market for bonds?

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Looking closer to home, investors will be looking ahead to the midterm elections in November. Ahead of the political event, news continues to come out of Washington. Over the weekend, Brett Kavanaugh was sworn in on Saturday as the 114th Associate Justice of the Supreme Court, after the Senate voted 50-48 in favor to confirm the nominee, in spite of several allegations of sexual misconduct facing the candidate.
Elsewhere, prior to the Wall Street open, St. Louis Fed President James Bullard is speaking at a OMFIF Foundation city lecture in Singapore.