Evergrande woes resonate in Wall Street: Dow, S&P futures in red


  • Wall Street options trading in red ahead of the market open
  • US indices have now logged three consecutive weekly losses
  • Evergrande woes weigh heavy in Wall Street

US futures were trading in the red on early Monday morning after the Dow Jones Industrial Average (Dow 30) posted three consecutive weeks of losses for the first time since September 2020.

Wall Street losses magnified after shares far away in Hong Kong witnessed a massive sell-off during the Asia Pacific trading session on Monday. The benchmark index of Chinese Autonomous Region – Hang Seng – plunged 3.5% after fears surrounding default by embattled developer China Evergrande Group loomed large, dragging down other property stocks. The index was trading at its lowest level in a year, while the property index was at its lowest since 2008 recession.

At the time of filing this copy Dow 30 futures for December 2021 expiry were trading at 34,027, down 435 points (1.26%). Similarly, the futures of S&P 500 with December 2021 expiry were trading at 4,381, down 40.75 points (0.92%).

On a monthly basis, the Wall Street indices have been living up to the reputation of the September Effect: with all three major averages down. While Dow 30 and S&P500 have corrected by 2.19% and 2.01% respectively, the Nasdaq Composite has corrected by 1.47% in the month of September.

The US has been reeling under a fresh wave of the COVID-19 pandemic, reporting more than one million fresh infections every week, for almost three weeks now. The worst-hit age group in this week seems to be the school going kids, as they make up one-fourth of the fresh cases in the country.

Meanwhile, the Federal Reserve’s highly anticipated September meeting is set to occur this week. Fed Chair Jerome Powell will hold a press conference on Wednesday at the conclusion of the two-day meeting. Investors are keenly watching out for insights about the Fed’s tapering of its easy monetary policy.