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Dow futures fall 230 pts; Brainard speech, jobless claims, Netflix in focus

Published 19/01/2023, 11:15 pm
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By Peter Nurse    

Investing.com -- U.S. stocks are seen opening lower Thursday, continuing the previous session’s selloff ahead of the release of widely-watched economic data, speeches from Federal Reserve policymakers and important corporate earnings.

At 07:00 ET (12:00 GMT), the Dow Futures contract was down 230 points, or 0.7%, S&P 500 Futures traded 28 points, or 0.7%, lower and Nasdaq 100 Futures dropped 87 points, or 0.8%.

Wall Street’s main averages closed sharply lower Wednesday, with the blue chip Dow Jones Industrial Average dropping over 600 points, or 1.8%, the broad-based S&P 500 fell 1.6%, its worst day since Dec. 15, while the tech-heavy Nasdaq Composite ended 1.2% lower, ending seven straight days of gains.

These losses followed the release of weak retail sales as well as industrial and manufacturing production data, which raised fears that the Federal Reserve’s aggressive interest rate hikes will plunge the U.S. economy into recession this year.

Adding to the negative sentiment were hawkish comments from Federal Reserve officials over the need for further interest rate hikes to combat inflation even as inflation shows signs of having peaked and economic activity is slowing.

There are more Fed policymakers scheduled to speak Thursday, most importantly Vice Chair Lael Brainard.

Investors will also carefully study the latest reading on jobless claims, housing starts data as well as the Philadelphia Federal Reserve's Jan business survey

A looming political showdown over the U.S. debt ceiling is also contributing to the weak tone, with the United States likely to hit its mandated $31.4 trillion borrowing limit this week.

Topping the corporate earnings calendar Thursday will be Netflix (NASDAQ:NFLX), with investors wanting to hear about its subscription additions and its newest experiment with ad-supported streaming.

Procter & Gamble (NYSE:PG), American Airlines (NASDAQ:AAL) and Truist Financial (NYSE:TFC) are also scheduled to release their numbers, while Alcoa (NYSE:AA) will also be in the spotlight after the aluminum producer reported a hefty net loss in the quarter.  

Oil prices fell Thursday as the weak U.S. economic data and an industry report showing a surprise jump in U.S. crude stocks raised demand concerns over the largest economy in the world.

The American Petroleum Institute reported on Wednesday that U.S. oil inventories grew a hefty 7.6 million barrels last week. This would be the second consecutive week of large inventory increases if confirmed by the official numbers from the Energy Information Administration later this session.

By 07:00 ET, U.S. crude futures traded 0.8% lower at $79.15 a barrel, while the Brent contract fell 0.7% to $84.42. 

Additionally, gold futures rose 0.1% to $1,909.25/oz, while EUR/USD traded 0.3% higher at 1.0820.

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