S&P 500, Dow Futures Begin Week On Upbeat Note But Credit Suisse Scare Gives Investors Jitters — Tesla, Energy Stocks In Focus

Zinger Key Points
  • U.S. stocks are striving to bounce back following past week's dismal showing.
  • Tech stocks could underperform in Monday’s session, going by the futures trading.

Major U.S. index futures have started the week on a mixed note after a dismal September. Fears concerning the financial health of Credit Suisse Group AG CS and a contagion effect could keep sentiment muted in the session.

Apprehensions are likely to increase as traders look ahead to another slew of Fed speeches and Friday’s jobs report.

Equities fell across the board in the week ended Sept. 30 as uncertainty regarding the rate and economic outlook continued to put pressure on the market. The major averages all ended at fresh two-year lows following Friday’s sell-off.

U.S. Indices' Performance In Week Ended Sept. 30
Index Performance (+/-)   Value
Nasdaq Composite -2.69%   10,575.62
S&P 500 Index -2.91%   3,585.62
Dow Industrials -2.92%   28,725.51

For the third quarter, the Nasdaq Composite, S&P 500 and Dow Industrials were down 4.10%, 5.28% and 6.7%, respectively.

Here’s a peek into index futures trading:

U.S. Futures' Performance On Monday During Premarket Session
Index Performance (+/-)  
Nasdaq 100 Futures -0.01%  
S&P 500 Futures +0.44%  
Dow Futures +0.57%  
R2K Futures +0.58  

In premarket trading on Monday, the SPDR S&P 500 ETF TrustSPY rose 0.44% to $358.75, while Invesco QQQ Trust QQQ was down 0.01% to $267.22, according to Benzinga Pro data.

Credit Suisse on Monday cut its year-end forecast for the S&P 500 Index from 4,300 to 3,850 and set a year-end 2023 target of 4,050. While noting that P/E multiples have fallen from 18.2 times to 15.1 times since August, analysts at the firm said they see a reversal of spread and volatility, leading to one-to-two times multiple points of rerating through year-end.

The firm sees 2023 as a year of weak, non-recessionary growth, with falling inflationary pressure. The returns in 2023 should be driven primarily by earnings growth, it added.

The Main Street calendar consists of two manufacturing readings, with both the S&P and Institute for Supply Management due to release their U.S. manufacturing purchasing managers’ indices at 9:45 a.m. EDT and 10 a.m. EDT, respectively. S&P's survey is expected to confirm the preliminary reading of 51.8 for September. ISM’s PMI is expected to show another month of expansion for the index in September, although at a slightly slower rate.

The Commerce Department will release its construction spending report for September at 10 a.m. EDT. Economists expect a 0.3% month-over-month drop in construction spending for August following a 0.4% drop in July.

Federal Reserve Bank of Atlanta President Raphael Bostic is due to give opening remarks at the 2022 Technology-Enabled Disruption at 9:05 a.m. EDT. Richmond Fed President Thomas Barkin will speak at the same conference at 11:45 a.m. EDT.

Kansas City Fed President Esther George is due to speak on payments before the Chicago Fed’s Payments Symposium at 2:15 p.m. EDT.

At 3:10 p.m. EDT, New York Fed President John Williams, who also serves as the vice chairman of the Federal Open Market Committee in this capacity, is scheduled to speak at the Hispanic conference.

See also: S&P 500 Closes Out The Third Quarter At New Lows: Can It Bounce Back?

Stocks In Focus:

  • Tesla, Inc. TSLA fell over 4% in premarket trading, with the stock reacting to a delivery miss and the AI Day 2022 held late Friday.
  • Credit Suisse and Deutsche Bank AG DB slid following fears regarding their financial health.
  • Energy stocks advanced taking advantage of a rebound in crude oil prices.

Commodity, Global Equity Markets:

Crude oil futures were bouncing back after a Bloomberg report said the OPEC+ group is contemplating a one-million-barrel per day production cut. After closing at sub-$80 levels last Friday the WTI crude oil futures were advancing more than 4% to over $82.50 a barrel.

Asian stocks that were open for trading closed Monday’s session mostly lower, although the Japanese market rose notably and the Malaysian market saw a modest gain. The Chinese and South Korean markets were closed for public holidays.

The European markets were trading notably lower on Monday amid worries concerning the health of the region’s major banks and the energy crisis in the wake of the Ukrainian war. The U.K. government rolled back its plan to cut taxes for the highest earners leading to a rebound in the beaten-down pound.

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