Stocks drop, US futures wobble on economic jitters

Bloomberg

Global stocks fall to a two-year low, while US index futures struggled for direction, amid concern hawkish policies by global central banks will spark a recession and earnings contraction.
December contracts on the S&P 500 Index were little changed, while similar futures on the Nasdaq 100 slid 0.3%. Carmaker Tesla tumbled 4% in premarket New York trading after deliveries in the third quarter fall short of expectations. In European trading, Credit Suisse Group AG’s shares hit record low as traders continued to speculate about its future.
Global markets remain jittery over the potential impact of monetary tightening on the economy after central banks, including the Federal Reserve, reiterated their resolve to contain runaway inflation. US stocks ended the previous quarter with a third straight quarter of losses for the first time since 2009 after the Federal Reserve delivered a third jumbo hike last month. Traders now await US jobs data later this week to gauge the path of the economy and Fed policy.
Inflation fears were further stoked by the renewed surge in oil prices, with West Texas Intermediate oil trading above $83 a barrel on indications that the Opec+ alliance was considering slashing production by more than 1 million barrels a day when it meets this week.
In Europe, stocks fall as the region’s energy crisis threatened to escalate further. The pound and UK government bonds initially rallied after Chancellor of the Exchequer Kwasi Kwarteng withdrew a proposal to abolish the top 45% tax rate, before ceding some of those gains.
The other big focus was Switzerland’s Credit Suisse Group AG, which slumped more than 11% as speculation mounted about the company’s future and its requirement for fresh capital.
Concern is also growing that central-bank policy tightening risks sending the global economy into recession and hitting corporate profits. EV maker Tesla offered a reminder of those risks, sliding after third-quarter deliveries fall short of expectations. Shares of fellow EV makers came under pressure on fears that supply-chain snarls would dampen their efforts to ramp up production.
Treasuries rise, paring the increase in yields witnessed in late trading. The 10-year rate shed almost 5 basis points.
Investors now await this week’s US jobs data for further clues about the Fed’s rate-hike trajectory. Central banks in Australia and New Zealand, considered bellwethers for developed market peers, are expected to extend their tightening cycles and raise rates by 25 basis points and 50 basis points respectively, according to Bloomberg Economics.