Stock futures stagnate as key averages set for positive week after two-day rebound

Active traders notice their account balance continues to increase

Traders work on the floor of the New York Stock Exchange (NYSE) on Monday, August 23, 2021 in New York City.

Michael Nagle | Bloomberg | Getty Images

Stock futures were flat in overnight trading on Thursday after gains on two consecutive days of the week pushed key averages into positive territory.

There was little change in futures contracts on the Dow Jones Industrial Average. The S&P 500 and Nasdaq 100 futures were also stable.

Markets staged a two-day rally of relief after the Federal Reserve signaled an immediate withdrawal from its ultra-easing monetary policy. Investors are also betting that Chinese real estate giant Evergrande’s debt crisis will not trigger a ripple effect in global markets.

The Dow blue chips advanced 500 points on Thursday for their best daily performance since July 20. The S&P 500 rose 1.2%, while the highly technical Nasdaq Composite gained 1%.

Key averages erased heavy losses earlier this week and are poised for a winning week. The Dow Jones is so far up 0.5% to break a three-week losing streak. The S&P 500 is up 0.4% and the Nasdaq 0.1% this week.

Some expect Evergrande to default on the bond payment as it is still unclear whether the developer was able to pay the $ 83 million in interest on the US $ denominated bond owed. Thursday. Government regulators have asked Evergrande to avoid short-term defaults on dollar bonds, Bloomberg News reported. Bondholders may also consider a 30-day grace period. Whatever the outcome, investors expect the impact on Wall Street to be contained.

“If Evergrande fails, exposure outside of China appears to be limited, and since the government will do whatever it takes to stop it,” said Edward Moya, senior market analyst for Oanda. “If China is successful, the global risk appetite may not be so shaken.”

On Wednesday, the Fed said a reduction in its monthly bond buying program “may soon be warranted,” but did not give a specific timeframe for when it could begin to moderate its buying.

“As we are a long way from the end of QE and rates close to zero, the tide is starting to turn,” said Anu Gaggar, global investment strategist at Commonwealth Financial Network. “Until now, the markets have greeted bad news as good news, but a market responding to signals from an economy capable of fending for itself without monetary policy crutches is a refreshing change.”

Nike shares fell 2.5% in extended trading on Thursday after the sneaker giant reported quarterly earnings that exceeded analysts’ expectations amid slowing demand in North America.

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