Stocks in the United States are experiencing a woeful trading session on Friday as concerns about another losing week dominate the headlines.
Uncertain Economic Growth
The U.S. economic forecast has been gloomy for Friday morning. Future economic performance seems uncertain after the delivery giant FedEx released early warnings regarding its earnings. The Dow Futures contract was down 0.6% or 190 points at 07:00 ET.
Similarly, the S&P 500 Futures dropped 0.7%, while the Nasdaq 100 Futures shed 0.8% or 100 points. The Thursday close for the equity market indicates its fourth consecutive losing week out of five.
The tech-focused Nasdaq Composite leads the losing streak and will lose 4.6% before the week ends. Experts noted that this is its worst weekly performance since June.
The S&P 500 is already down by 4.1% since the beginning of the week. Likewise, the Dow Jones Industrial Average is expected to be down 3.7%.
The general equity market outlook has not been encouraging so far. August’s inflation hit has been extreme and proved to be more impactful than predicted. Experts believe the Federal Reserve may have another reason to pursue its aggressive monetary policy. Any further move by the Fed would be detrimental to the future economic recovery.
The Fed is still expected to raise its benchmark interest rates 75 basis points next week. Since the June and July hikes, the possibility of a 100 basis point hike before the end is likely.
FedEx Records Disappointing Q1 Metrics
After the delivery behemoth FedEx (NYSE: FDX) recorded woeful performances for its quarter, the negative market sentiments are far from over.
As a result, the firm has withdrawn the earlier financial forecast it issued three months ago. The company cited low global demand for its services; its stocks plummeted by 19%.
The apparel maker Gap Inc. (NYSE: GPS) is another U.S. firm about to experience market turmoil. The popular pop star, Kanye West, is about to terminate the deal between his company and Gap.
The artist revealed that Gap failed to meet its part of the agreement. All eyes are on the upcoming Michigan consumer sentiment report for September, which is expected later in the week.
In another development, oil prices have surged again with a rebound after the previous session’s massive losses. The market was in panic mode before the price reversal, with the possibility of a third straight week of losses.
However, things changed on Friday when the spillover effect of the aggressive monetary tightening failed to make inroads. A strong USD has hindered the global crude oil market in the wake of soaring inflation in the United States.
This has made oil expensive for buyers to purchase with other currencies.
Meanwhile, at 07:00 ET, U.S. crude trades up 0.5% at $85.47 per barrel. Brent prices rose by 0.7% to trade at $91.45. However, Brent’s contract declined on Thursday by 4% and is expected to shed 2% before the week’s close.
