Single-Stock Futures Falter with Treasury Yield Highs

Thursday saw single-stock futures drop considerably towards the end of the session. Investors noticed 10-year Treasury yields reaching record highs. They have finally passed the 5.0% point. This is a very vital level that could have implications for investor mindsets going into the future.

Treasury yields have not reached such heights in 16 years since 2007. At that period of time, the highest peak it reached was 5.029%.

On the Dow Jones, single-stock futures dropped by 0.2%, the S&P 500 was down by 0.3%. Meanwhile, hot futures of the tech-heavy Nasdaq lowered by 0.4%.

We can also have a look more closely at specific stocks. SolarEdge, for example, lowered by 21.0% with recent revenue reports. On the other hand, Knight-Swift Transportation went up by 15.0%, outperforming analyst expectations.

Jerome Powell’s recent speech seemed to affirm investor worries about the direction the Fed is taking. The Fed Chair stated that they still have concerns surrounding inflation and just low economic growth in general. Therefore, the Fed wants to bring such pressures under control. He said that he believes there is still some space to increase interest rates. So, the rate hike investors have been worrying about seems likely, which explains the rise in values of single-stock futures.

He stated that while taking on more rate hikes would be a difficult process, it may be necessary. Officials in the Fed want to bring inflation down to 2.0% in the long run.

However, there are no concrete plans in place right now. There was just the statement of the desire to increase rates. Analysts and the market, in general, are expecting the Fed not to make any moves for now in November. Any hikes may be further off into the future.

Fed fund-managed futures seem to indicate that the change of rates remaining at their current level for November is at 92.0%.