You are using an older browser version. Please use a supported version for the best MSN experience.

Dow Futures Slide Amid Delta Variant Growth Worries; Taiwan Semi Supports Tech

TheStreet logo TheStreet 7/15/2021 Martin Baccardax
a store inside of a building: Dow Futures Slide Amid Delta Variant Growth Worries; Taiwan Semi Supports Tech © TheStreet Dow Futures Slide Amid Delta Variant Growth Worries; Taiwan Semi Supports Tech

The Thursday Market Minute

  • Global stocks continue to retreat from records highs as growth concerns overtake inflation worries amid the dovish messaging from Fed Chair Jerome Powell.
  • Powell, who insisted to lawmakers yesterday that the Fed is "still a way's off" from tapering its myriad support programs, appears before the Senate Banking Committee at 9:30 am Eastern time.
  • China Q2 GDP slows to 7.9%, but underlying data indicates solid, although not spectacular, growth metrics.
  • Taiwan Semiconductor posts record June quarter revenues, and sees September quarter sales rising 20% from last year on stronger handset and chip demand.
  • Oil prices retreat, even as stockpiles fall to the lowest levels since January 2020, on reports of a breakthrough in the OPEC supply stalemate.
  • U.S. equity futures suggest a mixed open on Wall Street following second quarter earnings from UnitedHealth, Morgan Stanley and a new post-pandemic low in weekly jobless claims.

Wall Street futures traded mixed Thursday, with tech stocks boosted by a robust near-term outlook from the world's biggest chipmaker and another pullback in Treasury bond yields, even as growth concerns continue to linger amid the dovish messaging from Federal Reserve Chairman Jerome Powell.

Powell, who closes his semi-annual testimony on Capitol Hill this morning with an appearance in front of the Senate Banking Committee, told Congressional lawmakers Wednesday that the Fed is "still a ways off" from removing the extraordinary monetary support needed to ensure and extended economic recovery.

Unfazed by the recent spikes in headline inflation, which hit a 13-year high last month, Powell repeated the Fed's view that price pressures will ease into the latter half of the year, adding that the labor market still needs "powerful support".

While placating investors who may have been preparing for a near-term tapering of the Fed's $120 billion in monthly bond purchases, Powell's dovishness may have also tweaked concerns for a slowdown, particularly given the fact that Delta-variant spread in the U.S. have taken the seven-day moving average of new infections to 21,000, nearly double recent tallies, while the Atlanta Fed's GDPNow forecasting tool sits at 7.9%, down from 8.6% at the start of the month.

Data from China Thursday underscored some of those concerns, and although second quarter GDP was a healthy 7.9%, the People's Bank of China is still looking to keep policy easy as infections accelerate around the region.

That said, Taiwan Semiconductor , the world's biggest chipmaker and a key Apple supplier, posted record June quarter revenues of $13.3 billion and forecast a September quarter tally that could reach $15 billion thanks in part to robust handset demand and improving dynamics in the global semiconductor supply chain.

Tech stocks responded in kind, with futures tied to the Nasdaq Composite indicating a more modest 10 point opening bell dip, supported by pre-markets moves for Apple, Advanced Micro Devices and Tesla .

Softer oil prices, however, are holding down gains for the Dow Jones Industrial Average, where futures are indicating a 160 opening bell decline. Yesterday's Energy Department data showed the lowest U.S. crude stocks since January of last year, but that was offset by reports of a potential agreement among OPEC members that could trigger an easing of supply cuts in the coming months.

WTI futures for August were marked $1.30 lower at $71.83 per barrel while Brent contracts for September slumped $1.15 to $73.61 per barrel.

Futures tied to the S&P 500, meanwhile, are priced for a 2 point bump following second quarter earnings from Morgan Stanley , UnitedHealth and Charles Schwab .

UnitedHealth shares marked 0.4% lower after it posted stronger-than-expected second-quarter earnings and raised its full year profit forecast, as pandemic-delayed medical procedures boosted fees for the country's biggest health care insurance company.

Away from equities, benchmark 10-year Treasury note yields retreated to 1.311% in overnight trading, pegging the gap between 2-year and 10-year notes -- a key indicator of economic growth -- at just 109 basis points, the narrowest since early February.

In overseas markets, European stocks drifted further from the record highs reached on Tuesday, with the Stoxx 600 down 0.44% in early Frankfurt trading, while the MSCI ex-Japan benchmark in Asia was marked 0.76% higher heading into the final hours of trading.

This article was originally published by TheStreet.


More From TheStreet

image beaconimage beaconimage beacon