Profit taking can result in a prolonged pullback on Wall Street

Major U.S. index futures are currently pointing to a lower open on Wednesday, with equities likely to extend the pullback seen in recent sessions.

Wall Street’s downward momentum comes as traders look to continue profiting from recent market strength markets.

Worries about the economic outlook and worries about aggressive new interest rates from the Federal Reserve should continue to weigh on equities.

U.S. stocks closed lower on Tuesday, losing ground for a third straight session, as worries about an economic slowdown and tighter monetary policy weighed on sentiment.

Data showing the United States Company the drop in activity for a second consecutive month weighed on the markets.

Investors were also eagerly awaiting Fed Chairman Jerome Powell’s speech at the central bank’s annual economic symposium in Jackson Hole later this week for clues about the bank’s outlook for the economy and interest rates.

Among the major averages, the Dow Jones ended down 154.02 points or 0.5% at 32,909.59 and the S&P 500 settled down 9.26 points or 0.2% at 4,128. .73. The Nasdaq outperformed and finished at 12,381.30, less than 0.3 points lower than the previous close.

Data from Markit Economics showed the S&P Global US Composite PMI came in with a score of 45 for August, down from a reading of 47.7 in July.

The manufacturing PMI fell to 51.3 in August from 52.2 a month earlier, while the services PMI fell to 44.1 in the month from 47.3 in July.

Commerce Department data showed U.S. new home sales fell 12.6% month-over-month to a seasonally adjusted 511,000 in July, the lowest figure since January 2016.

According to a report from the Federal Reserve Bank of Richmond, the Richmond Fed Composite Manufacturing Index fell to -8 in August from 0 the previous month.

Meanwhile, Redbook Research Inc. said the Redbook Index rose 13.5% in the week ending August 20, 2022 compared to the same week a year earlier.

Commodities, Forex Markets

Crude oil futures rise $0.66 to $94.40 a barrel after jumping $3.38 to $93.74 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,759, down $2.20 from the previous session’s close of $1,761.20. On Tuesday, gold climbed $12.80.

On the currency front, the US dollar is trading at 136.84 yen from 136.77 yen at the close of trading in New York on Tuesday. Against the Euro, the Dollar is trading at $0.9923 from $0.9970 yesterday.

Asia

Asian stocks fell for an eighth straight session on Wednesday, as Europe’s energy woes and a drought-fueled energy crisis in China kept investors jittery.

Investors also braced for a hawkish message from the Federal Reserve at this week’s Jackson Hole symposium.

The dollar traded firm and the 10-year US Treasury yield held above 3% after Minneapolis Federal Reserve Chairman Neel Kashkari said the Fed needed to be more aggressive to control inflation.

Gold was little changed as oil prices fluctuated after jumping nearly 4% overnight on news that OPEC may cut output to correct the recent plunge in oil prices. .

China’s Shanghai Composite Index fell 1.9% to 3,215.20 on fears that risk in the country’s property sector could spill over to the wider economy. Hong Kong’s Hang Seng index fell 1.2% to 19,268.74.

Japanese stocks closed at a two-week low as recession fears lingered. The Nikkei 225 index slid 0.5% to 28,313.47, while the broader Topix ended down 0.2% at 1,967.18.

Tech stocks were hit hard, with Screen Holdings and Tokyo Electron losing 1-2%. Video game company Konami lost 2.8% and Nintendo fell 2.6%.

Energy stocks outperformed, Inpex Corp. having gained 1.7%. Tokyo Electric jumped 10% after reports the government wants to restart more nuclear reactors to avoid power shortages.

Seoul shares posted modest gains to end a five-day losing streak. The Kospi edged up half a percent to 2,447.45 as the Korean won rose against the dollar for the first time in seven sessions.

The Bank of Korea will hold its monetary policy meeting on Thursday, with economists expecting a rate hike of 25 basis points.

Australian stocks closed higher, driven by gains in the energy and mining sectors. The benchmark S&P/ASX 200 index rose 0.5% to 6,998.10, while the broader All Ordinaries index ended up 0.6% at 7,242.30.

AUB Group jumped 5.5% and software solutions provider WiseTech Global jumped 12.8% after reporting encouraging annual results.

Supermarket group Coles lost 4.6% after reporting higher costs for the 2023 financial year.

Europe

European stocks were flat to slightly lower on Wednesday as investors worried about the worsening energy crisis and hawkish comments from Fed officials about the pace of future rate hikes.

Minneapolis Federal Reserve Chairman Neel Kashkari said Tuesday inflation was much more entrenched at a much higher level and the central bank needed to be more aggressive to get it under control.

It is believed that Fed Chairman Jerome Powell’s speech Friday morning in Jackson Hole could cement the market’s tone until the next meeting of the Federal Open Market Committee next month.

Investors are also awaiting the minutes of the ECB’s latest policy meeting, which could provide additional hawkish signals.

Currently, the UK FTSE 100 index is down 0.3%, the German DAX index is just above the unchanged line and the French CAC 40 index is up 0.1%.

Miners Anglo American, Antofagasta and Glencore fell 1-2% in London on concerns that risk from China’s property sector could spill over to the wider economy weighed on the mining sector.

The Costain group fell by more than 1%. The construction engineering company said its first-half pre-tax profit rose to £11.2 million from £9.1 million last year.

Lookers, a chain of car dealerships, jumped nearly 6% after reporting an increase in first-half profits and sales, despite continued weakness in the UK car market.

CTS Eventim AG, a German provider of ticketing and live services entertainmentrose 1.4% after recording a strong increase in normalized EBITDA in the first half, driven by an increase in sales.

Swedish construction and project development company Skanska AB rose slightly after signing a contract with National Highways to upgrade a 6.6 kilometer section of the A46 Newark Bypass in the Midlands region of the UK

US Economic Reports

New orders for U.S.-made durable goods were virtually unchanged in July, according to a report released Wednesday by the Commerce Department.

The Commerce Department said durable goods orders fell less than a tenth of a percent in July after jumping a revised 2.2% in June.

Economists had expected durable goods orders to rise 0.6% from the 2.0% jump reported the previous month.

Excluding a decline in transportation equipment orders, durable goods orders rose 0.3% for the second month in a row. Non-transport orders are expected to rise 0.2%.

At 10 a.m. ET, the National Association of Realtors is due to release its July pending home sales report. Pending home sales are expected to fall 4.0% in July after dropping 8.6% in June.

The Energy Information Administration is due to release its oil inventory report during the week ending August 19 at 10:30 a.m. ET. Crude oil inventories are expected to fall by 0.9 million barrels.

At 1 p.m. ET, the Treasury Department is expected to announce the results of this month’s auction of $45 billion in five-year notes.

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