U.S. Stocks May See Further Downside In Early Trading

After closing lower for four consecutive sessions, stocks may see further downside in early trading on Tuesday. The major index futures are currently pointing to a lower open for the markets, with the S&P 500 futures down by 0.3 percent.

Concerns about the economic outlook may continue to weigh on Wall Street amid worries aggressive interest rate hikes by the Federal Reserve will tip the economy into a recession.

On Friday, the Commerce Department is due to release its report on personal income and spending, which includes a reading on inflation said to be preferred by the Fed.

With Fed Chair Jerome Powell saying the central bank will require “substantially more evidence” inflation is on a sustained downward trend before halting its rate hikes, traders are likely to keep a close eye on the inflation reading.

Reports on consumer confidence, new and existing home sales and durable goods orders are also likely to attract attention in the coming days.

In U.S. economic news, the Commerce Department released a report showing a decrease in new residential construction in the U.S. in the month of November.

The report said housing starts fell by 0.5 percent to an annual rate of 1.427 million in November after tumbling by 2.1 percent to a revised rate of 1.434 million in October.

Economists had expected housing starts to decline by 0.7 percent to a rate of 1.415 million from the 1.425 million originally reported for the previous month.

The Commerce Department also said building permits plunged by 11.2 percent to an annual rate of 1.342 million in November after slumping by 3.3 percent to a revised rate of 1.512 million in October.

Building permits, an indicator of future housing demand, were expected to dive by 3.7 percent to 1.470 million from the 1.526 million originally reported for the previous month.

U.S. stocks closed lower on Monday, extending losses to a fourth straight session, as rising concerns over a recession amid rising interest rates hurt sentiment.

The major averages all ended notably lower. The Dow settled with a loss of 162.92 points or 0.5 percent at 32,757.54, the S&P 500 dropped 34.70 points or 0.9 percent to settle at 3,817.66, and the Nasdaq ended lower by 159.38 points or 1.5 percent at 10,546.03.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan’s Nikkei 225 Index plunged by 2.5 percent, while China’s Shanghai Composite Index slumped by 1.1 percent.

Most European stocks have also moved to the downside. The German DAX Index and the French CAC 40 Index are both down by 0.3 percent, although the U.K.’s FTSE 100 Index has bucked the downtrend and inched up by 0.1 percent.

In commodities trading, crude oil futures are rising $0.77 to $75.96 a barrel after climbing $0.90 to $75.19 a barrel on Monday. Meanwhile, after edging down $2.50 to $1,797.70 an ounce in the previous session, gold futures are advancing $13.70 to $1,811.40 an ounce.

On the currency front, the U.S. dollar is trading at 132.48 yen compared to the 136.91 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0609 compared to yesterday’s $1.0607.

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