Futures point to losses as the euro slides toward dollar parity
Stock futures pointed to losses for a second day in a row on Tuesday morning, as markets remained weighed by the euro’s slide toward parity with the dollar.
Near 7:20 AM ET, the S&P 500 and Dow futures were pointing to losses of more than 0.7% at the market open. Nasdaq futures were pointing to losses closer to 0.4% on Tuesday morning, a day after the technology index fell more than 2.2%.
Overnight, the euro fell as low as 1.0004 against the dollar as all eyes remain on whether the currency will drop below parity – or a 1:1 ratio – with the dollar.
In energy markets, crude oil futures were trading below $100 and commodities continued to be under pressure amid investors’ fears of a global recession.
All the financial easing experienced by advanced economies around the world has been dented by higher interest rates this year and sluggish financial markets, Tamara Pesek Vasiljev, chief economist at Oxford Economics, said in a note on Monday. In Vasiljev’s view, however, the recent slide in commodities indicates that inflation pressures may have peaked, which could ease financial conditions going forward.
“Now that commodity prices are once again declining and peak inflation appears to be at hand, we are likely to see the worst of tightening financial conditions,” Vasiljev wrote. “If so, the deteriorating conditions are bad but the level is still more in favour [an] An orderly slowdown, not a recession.”
Elsewhere in the markets, cryptocurrencies came under pressure again Tuesday morning, with Bitcoin (BTC-USD) dropping below $20,000 again after the world’s largest cryptocurrency enjoyed its best week since last fall.
This week also marks the start of the second-quarter earnings season, with PepsiCo (PEP) becoming the first major company to release results for the quarter before the market opens on Tuesday.
The beverage and snack giant reported better-than-expected sales and raised its full-year forecast. PepsiCo CFO Hugh Johnston will join Yahoo Finance Live at 9 a.m. ET to discuss these findings in more depth.
Elsewhere in corporate news, Walmart (WMT) and electric vehicle maker Canoo (GOEV) announced a deal Tuesday morning that included a retail deal to buy 4,500 electric vehicles with an option to buy an additional 100,000.
Canoo’s shares are up as much as 35% in pre-market trading following the announcement. Shares of the company, which debuted on the market through a SPAC merger in 2020, are down 70% this year to Monday’s close.
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