Wall Street is questioning whether or not the Fed is going too far
Stock futures are deep in the red on Friday, sending Wall Street towards another negative week as traders question whether or not the Federal Reserve's hawkish interest rate hike campaign could result in a recession. Bond yields are soaring around the world as foreign central banks also attempt to tamper inflation, and the U.S. 2- and 10-year Treasury yields both hit levels not seen in more than 10 years this week.
Continue reading for more on today's market, including:
- This tech concern could soon see a bounce.
- How options trades are taxed or tax-deductible.
- Plus, FedEx stock continues to drop; Costco reports earnings; and Raytheon wins big government contract.
5 Things You Need to Know Today
- The Cboe Options Exchange (CBOE) saw more than 1.34 million call contracts and 1.11 million put contracts traded on Thursday,. The single-session equity put/call ratio rose to 0.83, while the 21-day moving average rose to 0.67.
- Traders continue to eye FedEx Corporation (NYSE:FDX) after the delivery name revealed an increase shipping rates by 6.9% and its plans to slash another $4 billion in annual costs. FDX is 2.9% lower premarket, and 40.3% lower year-to-date.
- Costco Wholesale Corporation (NASDAQ:COST) is down 2.6% ahead of the open and pulling back from a 7.7% year-over-year lead, despite reporting earnings and revenue that beat estimates for the fourth quarter. Instead, weighing on the wholesaler is its operating margins, which came in slightly below forecasts.
- Marginally higher before the bell, Raytheon Technologies Corp (NYSE:RTX) just secured a major contract with the pentagon. Specifically, the defense company was awarded a $985 contract to develop hypersonic attack missile prototypes for the U.S. Air Force. In 2022, RTX is down just 3%.
- To close the week out, Wall Street will be eyeing the S&P U.S. manufacturing purchasing managers' index (PMI) and services PMI.
Euro Zone Data Drags on Markets Across the Pond
Asian markets continued to weaken on Friday as traders pored over inflation data out of Singapore, which rose at its quickest pace in 14 years in August, turning in a higher-than-expected 7.5% year-over-year jump. Elsewhere, Nomura slashed its forecast for China’s 2023 annual growth, noting the country’s extended Covid-zero regulations, as well as potential surge in cases once the region reopens. In response, the Hong Kong Hang Seng dropped 1.2%, the Shanghai Composite in China shed 0.7%, and the South Korean Kospi fell 1.8%. The Nikkei in Japan was closed for holiday.
European stocks aren’t faring well either, with disappointing data out of the euro zone. The S&P Global Purchasing Managers’ Index (PMI) dropped to 48.2 in September, pointing to a likely recession, as soaring energy costs amid Russia’s invasion of Ukraine weigh heavily across the region. Meanwhile, the U.K. government just announced a $67 billion energy package in hopes of giving the country’s economy a boost, just one day after the Bank of England (BoE) hiked rates by 50 basis points. At last glance, the London FTSE was 2.1% lower, the French CAC 40 has shed 2.2%, and the German DAX has taken a 2.5% haircut.