U.S. Futures Slip on Concerns of Global Slowdown

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U.S. futures dipped on Wednesday, under pressure from further signs that the global economic slowdown could prove a lengthy one. A slump in Chinese corporate profits and a gloomy speech from European Central Bank President Mario Draghi are both weighing on sentiment, while the bond market continues to send worrying signals about the outlook for growth.

U.S. Treasury bond yields continued to fall, with the benchmark 10-Year note hitting 2.36%, while the yield on the three-month Treasury bill had fallen to 2.45% by 6:40 AM ET (10:40 GMT). The inversion of the yield curve, in which longer rates trade blow short-term ones, has in the past been a reliable leading indicator of recession if sustained over time. Analysts warn that its predictive power may have weakened since the financial crisis 11 years ago, however.

Dow futures fell 64 points or 0.3% ), while S&P 500 futures slipped 4 points or 0.2% and tech-heavy Nasdaq 100 futures was down 4 points or 0.1%.

Earlier, European Central Bank president Mario Draghi said the ECB could delay raising interest rates and still had other tools at its disposal to support the economy. However, he admitted that the euro zone was experiencing a "persistent deterioration of external demand."

Boeing (NYSE:BA) could see movement today as the airplane maker attempts to recover from two deadly crashes involving its 737 Max 8 jet. The company is expected to brief pilots, technical leaders and regulators on software and training updates for the model.

Gilat (NASDAQ:GILT) was among the hardest hit in premarket trading, falling 3.6%, while Berkshire Hathaway (NYSE:BRKa) slipped 0.3% and Facebook (NASDAQ:FB) was down 0.2%.

Elsewhere, Tesla (NASDAQ:TSLA) was up 0.2%, while AMD inched up 0.1% and Microsoft (NASDAQ:MSFT) gained 0.3%. WellCare Health (NYSE:WCG) jumped 17.6% after reports that it is holding take-over talks with Centene (NYSE:CNC).

In commodities, gold futures gained 0.2% to $1,323.95 a troy ounce, while crude oilfell 0.7% to $59.50. The U.S. dollar index, which measures the greenback against a basket of six major currencies, slipped 0.1% to 96.203.

Source: Investing.com

Daniel PerkinsComment