Wednesday August 17th


Stock futures fall as Wall Street rally looks to take a breather after Dow’s 5-day winning streak

U.S. stock index futures fell on Wednesday as a rally that has propelled equity prices higher since mid-June appeared poised for a respite. Futures tied to the Dow Jones Industrial Average fell 232 points, or 0.68%. S&P 500 futures and Nasdaq 100 futures slid 0.92% and 1.05%, respectively. The Dow notched its fifth straight day of gains Tuesday. Meanwhile, the S&P 500 is going for its fifth positive week in a row as investors continue to gauge how much strength this rally has. The broad market index is now up 18% from its June lows. At the same time, further uncertainty remains in the market as the Federal Reserve plans to continue raising rates and shrinking the size of its balance sheet. “We would caution investors against chasing this rally,” said Mark Haefele, chief investment officer at UBS Global Wealth Management in a note to clients Wednesday. “We expect renewed market volatility ahead, and we continue to recommend positioning portfolios for resilience under various scenarios.” Data released Wednesday showed retail sales remain unchanged in July. Traders on Wednesday continued to comb through corporate earnings from the retail sector. Walmart and Home Depot reported Tuesday, while Lowe’s and Target posted earnings Wednesday morning. Wall Street also looked ahead to the release of minutes from the Fed’s most recent meeting. Japan stocks surged following better-than-expected export figures and Australian wages rose. The Shanghai Composite closed higher by 0.45% at 3,292.53 and the Shenzhen Component also finished positive by 1.01% at 12,595.46. Hong Kong’s Hang Seng index was 0.46% higher. Japan’s Nikkei 225 increased 1.23% to 28,868.91 while the Topix index added 1.26% to 1,981.96 after the country reported better-than-expected exports growth for July compared with a year ago. Its exports growth of 19% beat the 18.2% expected by analysts in a Refinitiv poll, driven by a strong recovery in car exports. In South Korea, the Kospi reversed after a positive start, falling 0.67% likely due to some profit taking among the major stocks. Oil hit a six-month low on Wednesday after a brief rally as concerns about the prospect of a global recession that would weaken demand overshadowed a report showing lower U.S. crude and gasoline stocks. Figures on Wednesday did little to improve the economic backdrop, showing British consumer price inflation jumped to 10.1% in July, its highest since February 1982, intensifying a squeeze on households. Brent crude fell as low as $91.51, the lowest since February, and was down 4 cents at $92.30. U.S. West Texas Intermediate (WTI) crude was 15 cents higher at $86.68. Gold prices were down slightly on Wednesday, with gains curbed by a firmer dollar, while investors braced for any guidance on future U.S. interest rate hikes from the minutes of the Federal Reserve’s latest policy meeting. Spot gold was down 0.2% at $1,772.29 per ounce. U.S. gold futures slipped 0.2% to trade at $1,786.50.