Nasdaq, S&P 500 Futures Slip As Volatility Remains Entrenched — Why This Strategist Remains Positive About Post-Tariff New Bull Market

• The market will have to contend with more earnings and Fed speakers on Thursday.
• Retail traders remain skeptical about the sustainability of the uptrend and brace for more volatility.
• Morgan Stanley views the Fed as a stumbling block to the broadening of the market rally.

The major U.S. index futures point to a negative opening for Wall Street stocks on Thursday as investors digest another batch of earnings reports and await comments from a slew of Federal Reserve officials.

Notwithstanding recent market volatility, a market strategist is positive about the near term. Morgan Stanley’s Chief U.S. Equity Strategist, Mike Wilson, said in a recent podcast that the firm is gaining more confidence in its core view that a new bull market began in April, with the end of the rolling recession and the start of a new cycle. 

He also took a potshot at the Fed for its hawkish stance.  “The full broadening out to lower quality, smaller capitalization stocks is being held back by a Fed that continues to fight inflation; perhaps not realizing how much the private economy and average consumer needs lower rates for this rolling recovery to fully blossom.”

How Futures Are Trading

As of 2:30 a.m. ET on Thursday, the Nasdaq 100 and Russell 2000 futures slipped 0.26% and 0.31%,  respectively. The Dow and  S&P 500 futures moved down about 0.15% each. futures edged up marginally. 

On Stocktwits, retail sentiment toward the SPDR S&P 500 ETF (SPY), an exchange-traded fund that tracks the S&P 500 Index, and the Invesco QQQ Trust (QQQ) ETF, which tracks the Nasdaq 100 Index, was at ‘bearish’ by early Thursday, although improving from ‘extremely bearish’ a day before.  The message volume on the SPY stream dropped off to ‘normal’ levels, while that on the QQQ stream remained ‘high.’

Commenting on the SPY stream, a bearish watcher said Wednesday’s market move was a “dead-cat” bounce and braced for another down day on Thursday.

Sharing an article about hedge funds and big investors dumping tech stocks at the fastest pace in two years, a user said 683 is the most likely upper bound for the SPY.

How Markets Fared Wednesday

Stocks reversed course and rebounded on Wednesday, using the stronger-than-expected private payroll gains for October as a reason to go on a bargain-hunting spree. Communication services stocks led the fightback, while consumer discretionary stocks also found strong buying interest.

The SPY,  QQQ,  SPDR Dow Jones Industrial Average ETF Trust (DIA), and the iShares Russell 2000 ETF (IWM) rose 0.35%, 0.65%, 0.47% and 1.44%, respectively.

Key Catalysts To Watch Out For

Among the Fed speeches for the day are:

- Fed Governor Michael Barr (11 a.m. ET)

-New York Fed’s John Williams (11 a.m. ET)

-Cleveland Fed’s Beth Hammack (12 p.m. ET)

-Fed Governor Christopher Waller (3:30 p.m. ET)

- Philadelphia Fed’s Anna Paulson (4:30 p.m. ET)

- St. Louis Fed’s Alberto Musalem (5:30 p.m. ET)

Noteworthy names featured on the earnings calendar for the day are Cars.com (CARS), ConocoPhillips (COP), Datadog (DDOG), DuPont (DD), D-Wave Quantum (QBTS), Hanesbrands (HBI), Krispy Kreme (KKD), Novavax (NVAX), PENN Entertainment (PENN), TripAdvisor (TRIP), Under Armour (UA), Warner Bros. Discovery (WBD), Airbnb (ABNB), Block (XYZ), DraftKings (DKNG)M Five9 (FIVN), Dropbox (DBX), Globalstar (GSAT), H&R Block (HRB), Lionsgate Studios (LION), Microchip (MCHP), Monster Beverage (MNST), Opendoor Technologies (OPEN), Take-Two (TTWO) and Trade Desk (TTD).

How Other Markets Fared

Crude oil futures rebounded early Thursday after dropping below the $60-a-barrel mark, and gold futures also firmed up. The 10-year U.S. Treasury note yield edged down after Wednesday’s ADP’s job data-induced rise, and the U.S. dollar ticked down against its major counterparts. Most major Asian markets rebounded as the buying interest seen on Wall Street overnight proved contagious.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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