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US Markets end in the red following volatile week

Published: 16:02 17 Sep 2021 EDT

Market preview

4:00pm: Tech stocks tumble weighing on the NASDAQ

Markets continued to slip throughout the afternoon, ending the day lower. A dip across the tech sector pushed the NASDAQ down 137 points to 15,043. The Dow Jones Industrial Average was also on the decline shedding 168 points or 0.48% Friday afternoon to end the week at 34,582.

The S&P 500 experienced a smaller decrease losing 41 points to end the day at 4,432.

Inflation is poised to be the major topic in the coming week ahead of the two-day monetary policy meeting at the Federal Open Markets Committee. Market watchers are expected to closely follow the event which could mark a shift in the Federal Reserves estimated timeline for tapering.  

12.05 pm: Lingering inflation concerns contribute to continuing September weakness for equities

US stocks fell in noon trading as the University of Michigan consumer sentiment data for September missed estimates and continues to hover at near-decade lows.

At midday, the Dow fell 191 points to 34,560, while the S&P 500 eased 34 points at 4,439 and the tech-heavy Nasdaq slipped 151 points, or 1%, to 15,030.    

Some of the trading volatility was caused by the quarterly "quadruple witching" event on Wall Street, in which individual stock options and futures, and index options and futures, all expire on the same day. 

“We expect volatility to increase over the next month driven by a seasonal pickup in investor uncertainty, continued virus uncertainty, and significant monetary and fiscal policy catalysts,” Goldman Sachs (NYSE:GS) head of derivatives research John Marshall said.  

Notable movers included shares of Invesco (NYSE:IVZ) Ltd, which climbed more than 6% after the after the Wall Street Journal reported that the money manager is in talks to merge its operations with State Street’s asset-management business.

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9.40am: US indices open mixed

US benchmarks opened weaker on Friday ahead of the quarterly futures and options expiries.

Following better-than-expected retail sales for August, released Thursday, the market is also watching for the University of Michigan monthly consumer sentiment index, while next week’s meeting of the Federal Open Market Committee and any announcement on tapering will also drive direction. 

The Dow Jones shed 30 points to 34,722 and the S&P 500 declined 11 points to 4,462. The Nasdaq exchange fell 54 points to 15,128.

“Inflation expectations have been climbing higher along with actual inflation,” said Fawad Razaqzada, market analyst with ThinkMarkets. 

“If consumers’ inflation expectations rise further, then this can manifest into real inflation, as workers will push for higher wages to compensate for rising prices in order to prevent their real earnings from dwindling. 

“If inflation expectations rise further, then this will likely be bad news for stocks as it would increase the likelihood of the Fed having to taper its QE program faster to avoid overcooking inflation.”

7.15am: Wall Street set to start flat

US stock futures point to a lower open in New York on Friday after a mixed session on Thursday as investors await today’s quarterly futures and options expiries.

The market is also wary ahead of next week’s meeting of the Federal Open Market Committee (FOMC) and any announcement that the rate-setting committee will slow down monetary support to the US economy.

Futures for the Dow Jones Industrial Average are down 50 points; the S&P 500 is behind by nine points and the tech heavy Nasdaq is down 33 points.

On Thursday, US benchmarks finished most lower despite better-than-expected retail sales data for August. The DJIA declined 63 points, or 0.18% to 34,751, while the S&P 500 dropped 0.16% to 4,473. The tech-heavy Nasdaq bucked the trend, gaining 0.13%, to 15,181.    

“Wall Street had a volatile intra-day session overnight, with the US retail sales jump unwinding the intra-day recovery as Fed tapering prospects were priced in leaving a very mixed finish for the major indices,” said Jeffrey Halley, a senior market analyst at OANDA.

"More ominously, futures have continued south today. Like overnight markets, US investors appear to be rotating into the apparent safety of tech.”

Five more things to watch for on Friday:

Options on stocks, stock indices and stock index futures expire this afternoon. Know as “triple witching”, the quarterly event is expected to be a big one, impacting trillions in traded assets.

The University of Michigan’s consumer sentiment Index, scheduled for release at 10 am Eastern Time, is forecast to rise to 72.2 in September after declining to a near-decade low of 70.3 the month before.

The gold price fell overnight as speculative long positioning was culled and OANDA said the metal faces another test of $1,750 if the US dollar remains firm today.

Innate Pharma (OTC:IPHYF, EPA:IPH) SA rose 35% to $7.79 in pre-market trading. SVB Leerink maintained the stock with an ‘outperform’ and raised the price target from $7 to $9.

AbCellera Biologics Inc rose 11% to $22 in pre-market trading. The FDA has expanded the emergency use authorization (EUA) for bamlanivimab 700mg and etesevimab 1400mg administered together to include post-exposure prophylaxis in certain individuals to prevent SARS-CoV-2 infection.

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