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Dow Futures Down 545 Pts; Concerns Ahead of Fed Meeting

Stock MarketsSep 20, 2021 06:53AM ET
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© Reuters.

By Peter Nurse   

Investing.com - U.S. stocks are seen opening sharply lower Monday, extending recent losses as investors fret about the Federal Reserve possibly starting to wind down its pandemic-era bond-buying program this week.

At 7 AM ET (1100 GMT), the Dow Futures contract was down 545 points, or 1.6%, S&P 500 Futures traded 60 points, or 1.3%, lower, while Nasdaq 100 Futures dropped 155 points, or 1%.

The main indices all closed lower on Friday, with the broad-based S&P 500 dropping 0.9%, the blue chip Dow Jones Industrial Average losing 0.5% and the tech heavy Nasdaq Composite down 0.9%. All three averages are lower for the month, having notched there straight weeks of losses.

The highlight of the week is the two-day Federal Reserve policy-setting meeting, ending on Wednesday, where policy makers are expected to start laying the groundwork for paring back stimulus. 

“The FOMC could decide to communicate that a 3 month moving average at acceptable levels in the monthly NFP [nonfarm payrolls] report would trigger a tapering implementation in November or December,” said analysts at Nordea, in a note.

Also weighing on sentiment were the fear of contagion from the crisis at heavily-indebted property developer China Evergrande Group (HK:3333), slumping commodity prices, and uncertainty over the outlook for President Joe Biden’s $4 trillion economic agenda as well as fears the U.S. government will run out of money as early as October without action on the debt ceiling. 

In corporate news, Tesla (NASDAQ:TSLA) will be in the spotlight after National Transportation Safety Board chief Jennifer Homendy noted that the electric car maker needed to address safety deficiencies in its full self-driving technology.

Netflix (NASDAQ:NFLX) will also be in focus after dominating at this year’s Emmy Awards, while the likes of FedEx (NYSE:FDX), General Mills (NYSE:GIS), Nike (NYSE:NKE) and Costco (NASDAQ:COST) all due to report earnings this week.

Crude prices fell, weighed by the general risk averse sentiment, a steady return of U.S. production after two hurricanes, and a higher dollar making commodities priced in the currency more expensive. 

The country’s oil and gas rig count rose by nine to 512 last week, according to Baker Hughes on Friday, its highest since April 2020 and double the level from this time last year.

Additionally, only 23% of U.S. Gulf of Mexico crude output remained offline as of Friday, an improvement from the 28% seen on Thursday, more than two weeks after Hurricane Ida hit.

By 7 AM ET, U.S. crude futures traded 2.1% lower at $70.30 a barrel, while the Brent contract fell 1.7% to $74.04. 

Additionally, gold futures rose 0.4% to $1,757.75/oz, while EUR/USD traded 0.1% lower at 1.1711.

 

Dow Futures Down 545 Pts; Concerns Ahead of Fed Meeting
 

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Comments (10)
JAMES CUNHA
JAMES CUNHA Sep 21, 2021 12:23AM ET
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...so what will be the excuse given this time for not providing tapering timeline? Unemployment still too high or that there Fed governors who are still actively trading stocks and they greatly benefit from the QE?
Prince Anagbah
Prince Anagbah Sep 20, 2021 10:55AM ET
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Hmm
Haris Asd
Haris Asd Sep 20, 2021 9:06AM ET
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Unless there's a %10 fall in the indices, fear is just a word.
mike jonex
mike jonex Sep 20, 2021 8:21AM ET
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Just scare tactics, they need to quit the theatrical tone. Save it for the movies.
Pratt Man
Pratt Man Sep 20, 2021 8:15AM ET
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I'm in mortgage business. Nothing changed after last taper 7 years ago..and the market almost doubled. So I have my shopping list ready.
Ajay Uppal
Ajay Uppal Sep 20, 2021 7:36AM ET
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Why is world over market bleeding? Is Evergrande issue similar to Lehman crisis - Fueling the property market based on borrowed/ easy money??
IceIce Baby
IceIceBaby Sep 20, 2021 7:36AM ET
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That's a problem for China, I don't care. :)
Jouni Matero
Jouni Sep 20, 2021 7:36AM ET
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And you think US has no problems? Lol
phyu phyu
phyu phyu Sep 20, 2021 7:24AM ET
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Selvakumar Df
Selvakumar Df Sep 20, 2021 7:20AM ET
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🤩
mike jonex
mike jonex Sep 20, 2021 7:18AM ET
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Exactly these scare tactic rants need to stop. The government has already said when tapering is going to start and it is not NOW! Stop writing about world is over stories. Sure you need to get paid but save it and sell your story to a director of movie films.
V E SKYLINE
V E SKYLINE Sep 20, 2021 7:18AM ET
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actually they change what they say all the time. originally it was suppose to be till 2023 when the pandemic started
mike jonex
mike jonex Sep 20, 2021 7:18AM ET
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lol well of course they change it but not after a week of them saying they are not.
Mauricio Salinas
Mauricio Salinas Sep 20, 2021 7:13AM ET
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temper tantrum, we want easy, cheap money 🤑🤑
 
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