S&P 500
S&P 500 futures gives up over 2% in premarket trading after yesterday, the Federal Reserve kept the interest rates unchanged at 0.0 – 0.25%, as was expected by markets. The central bank will continue to purchase treasuries at the current rate of $80 billion/month and mortgage-backed securities at $40 billion/month. Governor Jerome Powell, said that interest rates will remain at current levels until at least 2022 or until the US is on track to achieve maximum employment.
The Fed projects that the economy will contract by 6.5% in 2020, while in 2021 will grow by 5% and in 2022 it will see growth of 3.5%. The unemployment rate will be 9.3% in 2020 and then it is expected to drop to 6.5% in 2021 and to 5.5% in 2022. In 2023, the level is projected to be 4.1%.
United States Initial Jobless Claims registered in at 1542K, below the forecasts of 1550K in June 5. The Continuing Jobless Claims came in at 20.929M above the expectations of 20M in May 29.
The U.S. Producer Price Index (PPI) came in at 0.4% beating the expectations of 0.1% in May, the year PPI reading came in at -0.8%, also above the estimates of -1.2%. The Producer Price Index excluding Food & Energy came in at -0.1% in line with forecasts.
Worries about a second wave of COVID-19 infections have risen in some states as they are reopening. Travel and leisure stocks are under selling pressure on fears of new lockdown.
The S&P 500 futures give up 2.50% lower at 3,106. The Dow Jones futures are 3.12% lower at 26,108, while the Nasdaq futures are 1.59% lower at 9,924.
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In Europe, the Dax index is 2.81% lower at 12,178 dragged down by Lufthansa, Volkswagen and Daimler. The CAC 40 index is 3.16% lower at 4,895. In London, the FTSE 100 is 2.91% lower at 6,144.
Brent crude oil price plunge, as traders taking some profits off the table. WTI crude oil futures trade 5.91% lower at 33.75 while the Brent crude oil is 4.83% lower at $39.20.