Dow poised for longest skid in 3 months as stock market set to extend slide

The Dow on Wednesday is attempting to avoid its longest string of losses since mid August, as oil volatility has dented sentiment, and as investors await a key reading of consumer inflation.

How are the benchmarks faring?

Futures for the Dow Jones Industrial Average YMZ8, +0.12% fell 16 points to 25,320—a fourth consecutive loss for blue chips today would represent its lengthiest since Aug. 13, according to FactSet data. S&P 500 index futures ESZ8, +0.10% were virtually unchanged at 2,728, and a decline today would count as the index’s fifth consecutive drop, which would mark its longest since Oct. 24. Meanwhile, Nasdaq-100 futures NQZ8, -0.08% were down 16 points, or 0.2%, at 6,840.

On Tuesday, the Dow DJIA, -0.40% slid 100.69 points, or 0.4%, to 25,286.49; the S&P 500 SPX, -0.15% fell 4.04 points, or 0.2%, to 2,722.18; while the Nasdaq Composite Index COMP, +0.00% edged up 0.1 point to 7,200.87.

What’s driving the market?

Crude-oil’s abrupt and sharp price decline has led to heightened focused on consumer prices as a key read of inflation. The consumer-price index number for October will be released later Wednesday, and the reading could influence the Federal Reserve’s monetary policy plan, with a December interest-rate increase already expected, market participants said.

In Europe, investors were watching the latest developments in the Brexit negotiations after Britain and the European Union on Tuesday hammered out a provisional deal on the U.K.’s exit from the bloc and are approaching an “endgame,” as Prime Minister Theresa May has described developments.

However, May must secure support for the bill in parliament to move forward, and the politics around the exit from the European trade bloc have been fraught.

Meanwhile, the latest monthly report on crude production, which has been at the fore of investors’ minds, indicates that production is 2.6 million barrels a day higher than the same period last year, according to a Wednesday report from the International Energy Agency.

On that trade front, investors have been dealt conflicting views from the Trump administration, with National Economic Council Director Larry Kudlow on CNBC Monday taking issue with comments made by Peter Navarro, Trump’s trade adviser, who said: “globalist billionaires” are ratcheting up pressure on the White House to end its standoff with China on trade issues.

The public disagreement between the two White House officials raises questions about the negotiating strategy between China and the U.S. in testy tariff talks.

Late Tuesday, Bloomberg News reported that the Trump administration will hold off on imposing tariffs on auto imports—for now.

What were strategists saying?

The searing oil price dive continues to echo, whilst sterling-borne Brexit optimism wavers,” wrote Ken Odeluga Market Analyst at City Index, in a Wednesday research note.

Which stocks were in focus?

Shares of Canopy Growth Corp. CGC, -1.79% tumbled in premarket trade Wednesday, after the Canada-based cannabis company reported a wider fiscal second-quarter loss and revenue that rose less than expected.

Vapotherm Inc. VAPO, +0.00% priced its initial public offering late Tuesday at $14 a share, the low end of its $14 to $16 price range.

What data and speakers are ahead?

The consumer-price index for October is due at 8:30 a.m. Eastern Time with a rise of 0.3% expected. Core CPI, excluding volatile food and energy prices are set to rise 0.2%.

Randal Quarles, the Fed’s vice chairman for supervision, is scheduled to speak at 9 a.m. He is a voting member of the Federal Open Market Committee. Later, a Q&A with Jerome Powell is scheduled for 6 p.m. Eastern, well after the market closes on Wednesday.

 

/marketwatch.com

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