Stocks futures were lower Tuesday morning, setting the three major indices up for a third straight session of losses after last week’s tech-led selloff.
Shares of mega-cap technology stocks extended declines in pre-market trading as investors continued to unwind positions in the equity leaders of the past several months. Shares of Facebook (FB), Amazon (AMZN), Apple (AAPL) and Netflix (NFLX) were each off by at least 3% before the opening bell. Contracts on the Nasdaq sank 1.8%, or more than 200 points, shortly after 7 a.m. ET.
“The sell-off in risky assets has been concentrated in US Tech and momentum stocks, while credit has been more resilient and outperformed its beta to equity,” according to a note from Goldman Sachs strategists over the weekend. “This is likely due to the unwinding of some of the popular positions into the largest US stocks. In fact, the US equity rally has been very concentrated so far with very low breadth.”
“While aggregate US equity future net length is not very stretched, Nasdaq net equity future positioning is close to historical highs,” the analysts said. They added that an increase in the 10-year Treasury yield off the pandemic-era lows also likely triggered a rotation out of longer-duration stocks, including growth and tech names.
Still, the analysts added they “expect the current bull market to continue as the improved growth outlook coupled with supportive monetary policies should maintain the search for yield elevated and foster a compression of the ERPs [equity risk premiums].”
Elsewhere, investors eyed developments on the Covid-19 vaccine front. Tuesday morning, the CEOs of some of the pharmaceutical companies front-running the race toward creating on a vaccine wrote a public letter vowing to avoid cutting corners in the development process, even as they work with an expedited timeline to try and quickly distribute an inoculation.
“In the interest of public health, we pledge to always make the safety and well-being of vaccinated individuals our top priority,” according to the letter, signed by the CEOs of companies including AstraZeneca (AZN), Johnson & Johnson (JNJ) and Moderna (MRNA).
In news conference yesterday, President Donald Trump said he believed a Covid-19 vaccine could be approved as soon as October. Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases said seeing a vaccine receive approval by October was “unlikely” but “not impossible,” according to a recent interview with CNN.
—
Here were the main moves in equity markets, as of 7:16 a.m. ET:
-
S&P 500 futures (ES=F): 3,398.75, down 18.75 points or 0.55%
-
Dow futures (YM=F): 28,058.00, down 16 points or 0.06%
-
Nasdaq futures (NQ=F): 11,341.5, down 207.25 points, or 1.79%
-
Crude (CL=F): -$2.09 (-5.26%) to $37.68 a barrel
-
Gold (GC=F): -$11.00 (-0.57%) to $1,923.30 per ounce
-
10-year Treasury (^TNX): -3.3 bps to yield 0.69%
Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on March 11, 2020 in New York. – Wall Street stocks dove deeper into the red in afternoon trading on March 11, 2020, with losses accelerating after the World Health Organization declared the coronavirus a global pandemic. Near 1710 GMT, the Dow Jones Industrial was down more than 1,200 points, or 5.0 percent, at 23,777.17. The broad-based S&P 500 slumped 4.6 percent to 2,749.88, while the tech-rich Nasdaq Composite Index tumbled 4.4 percent to 7,979.15. (Photo by Bryan R. Smith / AFP) (Photo by BRYAN R. SMITH/AFP via Getty Images)
—
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.
Find live stock market quotes and the latest business and finance news
For tutorials and information on investing and trading stocks, check out Cashay