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Futures fall after another day of losses after Fed rate hike, sell-off

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The pace of rate hikes puts economy and markets in 'danger zone', says Peter Boockvar

Equity futures were lower Friday morning as investors continued to react to the Fed’s rate hike and concerns about a potential economic downturn.

The Nasdaq 100 lost 0.48%. The Dow Jones Industrial Average futures fell 91 points, or 0.3%. S&P 500 futures were up 0.36%.

Costco the stock fell about 2.6% in extended trading. While the retailer posted fourth-quarter sales and profits that exceeded analyst expectations, it is seeing higher freight and labor costs.

delivered on Thursday another day of losing as the market remains poised to end the week where it started. The Nasdaq Composite fell 1.4% to 11,066.81 points. The S&P 500 fell 0.8% to 3,757.99, while the Dow Jones Industrial Average ended the day 107.10 points lower at 30,076.68, a loss of 0.3%.

With the latest pullback, the Dow has given up about 2.4% this week. Both the S&P and Nasdaq saw slightly sharper declines, dropping 3% and 3.3% respectively in the week so far.

Bond yields are also rising upward risewith the 2- and 10-year Treasuries hitting a high not seen in more than a decade.

Manufacturing, consumer discretionary, growth technology and semiconductors were all sectors hit amid fears of slowing economic growth. Meanwhile, defensive stocks outperformed.

“You’ve just had this volatility that no one seems to be able to keep up with,” said Tim Lesko, senior wealth advisor at Mariner Wealth Advisors.

Lesko said more investors are beginning to accept that a recession is on the way after the Fed’s decision this week to raise interest rates by 75 basis points and FedEx CEO Raj Subramaniam said on CNBC last week that he believed one was imminent. Once that happens, Lesko said investors will react differently.

“At some point they will find out that a recession is not the end of the world, and they will get constructive again on stocks,” he said. “But right now we’re pretending the sky is falling.”

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