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Dow Futures Rise 300 Pts; Powell Speech, Durable Goods in Focus

Stock Markets Sep 27, 2022 06:52AM ET
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By Peter Nurse

Investing.com -- U.S. stocks are seen opening higher Tuesday, rebounding as investors seek out bargains after recent sharp losses but remain concerned about future growth as the Federal Reserve tightens monetary policy.

At 07:00 ET (11:00 GMT), the Dow Futures contract was up 300 points or 1%, S&P 500 Futures traded 45 points or 1.2% higher, and Nasdaq 100 Futures climbed 150 points or 1.4%.

The major equity averages slumped further on Monday, extending last week's declines with the fifth straight day of losses. The blue-chip Dow Jones Industrial Average ended over 300 points or 1.1% lower, entering a bear market territory, while the broad-based S&P 500 fell 1%, closing at its lowest level this year. The tech-heavy Nasdaq Composite ended down 0.6%.

Investors can't stop worrying about the U.S. economy entering recession, with the Federal Reserve determined to tame inflation running at 40-year highs, whatever the extent of the economic pain that its aggressive interest rate hikes cause in the short run.

Cleveland Fed President Loretta Mester made this clear on Monday, saying the U.S. central bank needs to keep policy restrictive for some time, and if there is an error to be made, better that the Fed do too much than to do too little.

Goldman Sachs downgraded equities to underweight in its global allocation over the next three months, saying, in a note, that "current levels of equity valuations may not fully reflect related risks and might have to decline further to reach a market trough."

This week will feature speeches by a slate of Fed officials, including Chairman Jerome Powell later Tuesday, while investors will also be watching for August durable goods orders as well as September consumer confidence for signs that the monetary tightening is indeed having an impact on economic growth.

Oil prices gained Tuesday, rebounding from the lowest levels since January as markets weighed the potential for a reduction in supply even as recessionary concerns, tighter monetary policy, and a rally in the dollar dimmed the outlook for demand.

Major crude producers BP and Chevron said that they had cut production at some offshore oil platforms in the Gulf of Mexico in anticipation of Hurricane Ian.

Additionally, the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, meets next week and could follow up last month’s modest cut in output.

The American Petroleum Institute releases its latest estimate for U.S. crude stocks later in the session, with another modest rise expected, which would be the fifth straight weekly rise if confirmed.

By 07:00 ET (11:00 GMT), U.S. crude futures traded 1.4% higher at $77.78 a barrel, while the Brent contract rose 1.5% to $84.13. Both contracts sank by about $2 a barrel on Monday, adding on to Friday's 5% slump.

Additionally, gold futures rose 0.7% to $1,644.20/oz, while EUR/USD traded 0.2% higher at 0.9627.

Dow Futures Rise 300 Pts; Powell Speech, Durable Goods in Focus
 

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Comments (4)
Joe Rizzuto
Joe Rizzuto Sep 27, 2022 8:23AM ET
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this fed has made mistake after mistake. plain as day, they are doing it again.
lakes Tenn
lakes Tenn Sep 27, 2022 8:23AM ET
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so you don't want them to fix Bidens mistake. need to stop inflation. only thing down is oil and that is being manipulated by release of oil reserves
gab nea
gab nea Sep 27, 2022 7:33AM ET
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the fed is still not saying, and I would like to know why the fed in march 2020, reduce interest rates to negative zero, causing massive inflation? why?
Sidney Glover
Sidney Glover Sep 27, 2022 7:33AM ET
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are you serious? pandemic. kept the asset markets alive
Joe Rizzuto
Joe Rizzuto Sep 27, 2022 7:33AM ET
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you must be an id**it, in march 2020, the global economy and the u.s was shut down by an invisible villain. the real question is why the kept rates so low and continues to buy bonds for all of 2021.
lakes Tenn
lakes Tenn Sep 27, 2022 7:33AM ET
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she is just a 🐑. will try to spin anything as a negative for trump and a positive for Brandon. only thing is that everything was positive under trump and I don't even have to say how things have been since
Sep 27, 2022 7:33AM ET
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the market will need a very strong reason to break the 29200 low of June. maybe market will engulf the Powell's pessimism and is hitting 29800 by the end of the day
lakes Tenn
lakes Tenn Sep 27, 2022 7:26AM ET
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red after Powell speech. negative gdp coming Thursday
 
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