Monday May 16th


S&P 500 futures fall slightly as market attempts to rebound from ongoing sell-off

U.S. stock index futures fell on Monday as the market attempts to rebound from a relentless sell-off that’s punished tech stocks and pushed the broader index to the brink of a bear market. Futures tied to the Dow Jones Industrial Average were 15 points lower. S&P 500 futures dipped 0.2% after the benchmark nearly fell into a bear market last week before a Friday rebound. Nasdaq-100 futures slipped 0.2%. After a long spate of selling, markets rebounded on Friday, with the Dow rising 466.36 points and the S&P 500 climbing 2.39%. The Nasdaq Composite jumped 3.82% and posted its strongest one-day gain since November 2020. But major averages still posted steep losses for the week and are undergoing an intense sell-off as the Federal Reserve attempts to tamp down inflation with aggressive rate hikes. The Dow’s 7-week losing streak is its worst since 2001. The S&P 500 just posted its first 6-week losing streak since June 2011. “Given the history of bear markets, coupled with the fact that the Fed has just begun its rate hike cycle and would like to see financial conditions continue to tighten so that demand pulls back further, [Friday’s] rally will most likely weaken,” said Quincy Krosby, chief equity strategist for LPL Financial. The S&P 500 sits 16% off its record high, while the Nasdaq Composite is down more than 27% as investors hit growth stocks trading with lofty valuations the hardest as interest rates spiked. Those names rebounded on Friday and some looked set for some more gains in Monday’s session. Amazon and Tesla were both in the green in premarket trading. Apple, which fell into a bear market at one point last week, was also indicated higher. Some investors and analysts say, whether or not the bottom is in, there are good buying opportunities at the market’s current lows. “I’m not calling the bottom here, but there’s some opportunity here to dollar cost average,” said Sylvia Jablonski, CEO and chief investment officer at Defiance ETFs, told CNBC. “If you’re sitting on a bunch of cash, you’re locking in losses because of inflation. Investing in equities or asset classes that you believe in... it is the lesser evil. The selling fatigue will wane, the market will reset. It’s unlikely the Dow and the S&P are going to be in correction territory six months to a year from now.” Retail earnings season kicks off this week with several big-box retailers set to report results for the first quarter, including Walmart, Target and Home Depot. Elsewhere, Deere is also on deck, along with a handful of technology companies. Investors will also have their eye on retail sales data this week, which could give them insight into how retailers are managing inflation, which remains near 40-year highs. Spirit Airlines shares surged by 20% in premarket trading after JetBlue announced a tender offer to acquire the airline for $30 a share. Carvana’s stock price jumped 12% in Monday premarket trading after the used car company issued strong core earnings expectations for 2023, and outlined a plan to cut costs. Shares in the Asia-Pacific closed mixed on Monday, after China reported disappointing economic numbers as a result of Covid restrictions. Mainland Chinese stocks were lower, with the Shanghai Composite down 0.34% at 3,073.75 and the Shenzhen Component fell 0.6% to 11,093.37. The broader Hang Seng index saw volatile swings on Monday, wavering between gains and losses, to finally end the day higher by 0.26%. Tech stocks in Hong Kong struggled for direction, rising early in the session and then falling after bad news from China on the economic front. The Hang Seng Tech index closed near the flatline. Elsewhere in Asia, Japan’s Nikkei 225 gained 0.45% to close at 26,547.05, while the Topix was last below the flatline at 1,863.26. The Kospi in South Korea fell 0.29% to 2,596.58, and the Kosdaq closed 0.37% higher at 856.25. Oil prices slipped on Monday, giving up earlier gains as investors took profits after a surge in the previous session, but global supply fears loomed with the European Union preparing to phase in a ban on imports from Russia. Brent crude futures declined 1.3% to $110.14, while U.S. West Texas Intermediate (WTI) crude futures dropped 1.14% to $109.22. Both benchmarks, which jumped about 4% last Friday, earlier increased by more than $1 a barrel, with WTI reaching its highest since March 28 of $111.71. Gold prices fell more than 1% to their lowest in 3-1/2 months on Monday as elevated bond yields and a firmer U.S. dollar dampened bullion demand, even as riskier assets dropped after grim China economic data. A stronger dollar makes gold expensive for overseas buyers, while higher Treasury yields raise the opportunity cost of holding zero-yield bullion. Spot gold was down 0.7% at $1,798.80 per ounce as of 5:20 a.m. ET, after hitting its lowest since Jan. 31 at $1,786.60 earlier in the session. U.S. gold futures fell 0.6% to $1,798.