naphtalina/iStock via Getty Images
Stocks index futures are mixed Tuesday as equities come off another tough day that left growth stocks in a bear market.
Nasdaq 100 futures (NDX:IND) +0.1% are up slightly. S&P futures (SPX) -0.1% and Dow futures (DJI) -0.2% are down.
The Nasdaq 100 closed in bear market territory for the first time since March 2020, down more than 21% from the late December closing high.
The index is trading more than 13% below its 200-day moving average.
“Over the last 30 years, the index only traded with a significantly lower deviation (from the 200-day) in 2000 and 2008,” Oppenheimer technical analyst Ari Wald wrote. “However, in both cases, a countertrend rally developed from similar conditions as now. The point is that, even as we assume the worst, we think tactical conditions are currently more favorable than not.”
The VIX is up again, close to 33. Oil continues its downward trend, with WTI down 6% below $97 per barrel.
Rates are lower. The 10-year Treasury yield is down 3 basis points to 2.11%.
The Fed starts its two-day meeting today and they will get another inflation data point when producer prices for Febrauary arrive before the bell. Economists expect the headline PPI to be up 10% year over year, with the core rate up 8.7%.
“US producer price inflation for February is pre-war data,” UBS chief economist Paul Donovan said. “It does reflect corporate pricing power. The year-over-year rate looks back to a time when almost all the US was still in lockdown. The month on-month rate shows recent pricing pressures, but is distorted by seasonal adjustment.”
“There is a strong consensus that the FOMC will take a hawkish stance, barring a surprise intensification or broadening of the Russia-Ukraine war,” Standard Chartered strategist Steve Englander said. “The rapidity with which 2Y UST yields hit new highs after the initial riskoff reaction indicates how well anticipated a hawkish Fed stance is.”
“We are not convinced by the ultra-hawkish arguments, but the FOMC may not be willing to consider dovish scenarios without clear signs of slowing economic growth. We think lagging real wages and falling disposable income will lead to a pause after July, but doubt the FOMC is ready to consider that case just yet.”
Away from Wall Street stocks in China tumbled again.