Stocks looked headed for a nervy start to trading Monday after the biggest two-day slide for global equities since June left investors on edge. Currencies began the week with little fanfare, while crude oil declined.
Futures pointed to modest losses in Japan and Australia, and S&P 500 futures retreated. U.S. markets are shut Monday for a holiday after the worst week for the Nasdaq since March. The dollar was steady in early trading, while the pound ticked lower going to another round of Brexit negotiations.
“Risk assets remain fragile following Thursday’s tech-led rout and volatility spike,” said Ben Emons, managing director for global macro strategy at Medley Global Advisors. “With stimulus having been key for supporting equities and such lofty valuations, its renewal will be crucial not only for the recovery but as a driver for equities as job risks mount.”
Traders are on tenterhooks as the week kicks into gear and they continue to chart the path for a global economy dealing with a pandemic. Federal Reserve Chairman Jerome Powell responded positively to Friday’s U.S. employment data but reiterated his view that the economic recovery has a long road ahead. One big event later this week is the European Central Bank’s policy meeting.
Here’s a look at U.S. equity size and style total returns year to date:
Weekly market recap
The U.S. bull market is receiving a new lease on life from a surprising source: stock-market timers. In recent trading sessions, the timers have beaten one of their most rapid retreats I’ve seen in more than 40 years of tracking investment newsletters.
The upshot is that the average market timer is now closer to the “extreme bearishness” end of the spectrum than to the “extreme bullishness” where he had been just a few days ago. That’s encouraging from a contrarian point of view.
This week in focus
Here are the most anticipated earnings releases for the week ahead:
- Most anticipated earnings are around the corner.
Here’s a list of economic events for the week ahead: