S&P, Nasdaq, Dow futures tick lower with more housing, consumer data ahead
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Stock index futures were slightly lower on Tuesday, while Treasury yields remained mostly unchanged.
S&P futures (SPX) were -0.2%, Nasdaq 100 futures (NDX:IND) were -0.2%, and Dow futures (INDU) were -0.1%.
The 10-year Treasury yield (US10Y) rose 1 basis point to 4.40% and the 2-year yield (US2Y) fell 2 basis points to 4.88%.
“We have the 7yr auction in the day ahead too to help take the market pulse,” ING said. “So far though, the break below 4.5% has been pivotal. It still feels like we don’t have enough to gap lower just yet. But far less reason to gap back higher given what we know.”
“Directionally it’s tough to argue against falling yields for now,” they added. “The data is lining up in support of it, or at least swaying in that direction. It does seem that inflation worries have been downsized, with lower delivered inflation helping.”
“Expectations have eased off too. US consumer confidence is just about hanging in, but is now teetering on the verge of a break below 100 (key breakeven reference). That will be a key reading ahead.”
Before the bell the September Case Shiller house price index is due. The Composite index is expected to have risen 4% year over year.
After the start of trading the Conference Board releases its November measure of consumer confidence. The forecast is for a drop to 101.
There’s been discussion about the usefulness of sentiment surveys given the increasing split in views based on political affiliation.
“For all these distortions to the consumer surveys, though, the expectations components are still a decent guide to growth in real consumption spending,” Pantheon Macro’s Ian Shepherdson said. “The relationship between the expectations index and real consumption spending broke down during the Trump administration from 2016-to-20 … but the pre-2016 relationship has reasserted itself over the past couple years.”
“It currently signals softer real consumption spending following the 4.0% annualized leap in the third quarter, but not a collapse. More immediately, though, we look for a fourth straight decline in the November Conference Board consumer confidence index, due today, to about 101 from 102.6. A much sharper drop, particularly in the expectations index, would tilt the risks towards a steeper slowing in the rate of real consumption spending growth in Q4.”
