Futures point to a Wall Street recovery after the worst day of the S&P 500 in four months

US stock futures signaled a recovery on Tuesday after the worst day in the S&P 500 for more than four months.

  • The future of the Dow Jones Industrial Average YM00,
    + 0.97%
    326 points or 1.1% jump to 34,164

  • The future of the S&P 500 ES00,
    + 0.86%
    0.9% or 38 points to 4,388

  • The future of the Nasdaq 100 NQ00,
    + 0.76%
    Rose 0.8% or 114 points to 15,125

Monday, Dow Jones Industrial Average DJIA,
614 points or 1.8% lower 33970, S&P 500 SPX,
4358, down 75 points or 1.7%, and the Nasdaq Composite Comp,
330 points or 2.2% decrease to 14714.

What is driving the market

Revealed story of China Evergrande 3333,
A property developer that is expected to miss out on paying two key interest rates this week set the tone for market turmoil on Monday. It came on a day when many Asian markets were closed for the holidays.

“The overnight rise in market sales that we believe is largely driven by technical sales flows (CTAs and option hedgers) in weak liquidity environments, and the excessive response of prudent traders to risky considerations,” said Mark Kolanovich. JP Morgan.

Kolanovic expects recovery as the delta wave of coronavirus fades, and companies expect to lose third-quarter earnings expectations.

Wall Street analysts were troubled that Evergrand was not China’s Lehman moment.

“A true‘ Lehman moment ’is a crisis of a very different dimension. Lenders strike across much of the financial system, the sharp rise in the credit crunch away from the real estate sector and the reluctance of banks to confront each other in the interbank funding market. And with all of this, we also have to look at the massive policy mistakes on the part of the Chinese authorities, ”said Barclays strategists led by President Ajay.

Concerns at Evergrand came at a critical juncture, with several agencies rightly warning that September would be dangerous for U.S. equities after a smooth summer.

As the Federal Reserve begins the first of a two-day meeting on Tuesday that could lead to further interest rate forecasts, Congress has so far refused to raise the debt limit as it fights to agree on a package of infrastructure spending.

Even after Monday’s fireworks and losses in nine of the last 11 sessions, the S&P 500 is just 4% below its record high.

Other assets are traded
  • Hang Seng HSI,
    + 0.51%
    Slight progress was made after Monday’s defeat, when the Nikkei 225 NIK,
    Fall in Tokyo after the holidays

  • Stocks Europe 600 SXXP has also seen gains in the European market,
    + 1.00%
    1% increase in morning trade.

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