Why Did Stocks Drop Again?
What’s in Today’s Report:
- Why Are Stocks Dropping Again? (Three Reasons)
- Chart: 10-Year Treasury Yield
Stock futures are rebounding from yesterday’s sharp losses this morning as bond yields pullback with the 10-year dipping below 1.50% overnight, easing valuation concerns.
Regarding Evergrande, the company’s stock rallied 15% overnight as the developer announced the partial sale of a regional bank stake that will result in $1.5B in cash.
Looking into today’s session there is one economic report: Pending Home Sales Index (E: 0.9%) but it should not move markets.
That will leave traders focused on a busy day of Fed chatter: Harker (9:00 a.m. ET), Powell (11:45 a.m. ET), Daly (1:00 p.m. ET), Bostic (2:00 p.m. ET), and Williams (5:00 p.m. ET).
Bottom line, the bond market has been a major driver of equity flows this week and if yields continue to pullback as they did overnight, then a rebound in the major stock indexes is likely however a retest of yesterday’s highs would result in another uptick in volatility.
