It's not a good look to start the day for risk sentiment with S&P 500 futures seen down 27 points, or 0.7%, currently. Nasdaq futures are down 1.1% while Dow futures are down by 0.4% as we look towards European morning trade. This comes after another day of selling in Wall Street with the early gains faltering into the close once more. It is but another episode of how stocks are failing to find any lasting relief in trading this week.
The S&P 500 chart exemplifies the downside momentum currently and a break below the 50.0 Fib retracement level at 3,982 spells further danger for risk trades ahead of the US jobs report tomorrow.
Be mindful that it is going to be a long weekend in the US and perhaps softer employment data tomorrow may help to provide a bit of a cushion in the short-term. The key economic data release before the FOMC meeting this month is the US consumer inflation report though and that will only come on 13 September.
I fear that given the recent mood in markets, stocks will still continue to struggle ahead of that even if there might be a light reprieve tomorrow. But another hot set of non-farm payrolls numbers may very well put fuel on the fire for stocks and we could start to talk about the June lows pretty soon in that instance.
