From the Wall Street Journal’s “Stock Futures Retreat After Dow’s Record” posted early Monday:
U.S. stock futures dropped Monday, suggesting that the major stock indexes will retreat from last week’s all-time highs after markets in China and Hong Kong plummeted.
Chinese shares tumbled after Beijing once again took aim at some of the country’s fast-growing listed companies, fueling investors’ concerns about regulatory risks. The Shanghai Composite Index dropped 2.3% by the close of trading, while Hong Kong’s Hang Seng Index shed 4.1% in its biggest one-day rout in over a year.
Cryptocurrencies jumped Monday, with bitcoin rising more than 18% from its 5 p.m. ET level Friday. Investors pointed to short positions being liquidated and speculation that Amazon.com Inc. AMZN 0.51% may be venturing into digital currencies. The price of bitcoin rose to as much as $39,544.29, its highest level since mid June, according to CoinDesk.
Rising concerns over the Delta variant of Covid-19 and concerns over economic growth are also likely to challenge the pace at which the U.S. stock market will rise in the coming weeks, investors say. Money managers are also awaiting guidance from the Federal Reserve this week, including policy makers’ outlook on inflation and any clues on when the central bank may start scaling back its bond purchase program.
“This will be a choppy environment for the rest of the year as markets deal with growth that isn’t as strong, and markets turn to the potential withdrawal of policy support,” said Hugh Gimber, a strategist at J.P. Morgan Asset Management. “You would expect that the spread of the Delta variant would put restrictions in place longer and some supply bottlenecks may not last just a few months.”
My take: Only two more trading days before June quarter earnings.