Stock market futures ticked slightly higher again on Thursday morning. In early market trading the Nasdaq 100 futures (NDX:IND) have jumped 0.2%, while the S&P 500 futures (SPX) gained 0.1%, and the Dow futures (INDU) have risen 0.1%.
The 2-10 yield spread has now inverted to -0.37 basis points, marking the deepest inversion since 2000. The U.S. 10-year Treasury yield (US10Y) is down three basis point to 2.71%, while the U.S. 2-year Treasury yield (US2Y) is down one basis point to 3.09%.
Jeffrey Gundlach, CEO of DoubleLine Capital LP stated: “The 2-year 10-year yield curve inversion is gaining steam. At 36 basis points right now. Rough road ahead.”
The Bank of England raised key rates by 50 basis points to 1.75%, marking the central banks most significant increase since 1995, as it warns of a long recession.
From an economic calendar vantagepoint, markets prepare to process advanced international trade goods data along with initial jobless claims figures both before the opening bell.
BTIG outlined in a investor note that: “Markets have slowed to a crawl again with VIX breaking under 22, and SPX nearing June’s high of 4177.”
“At this point it’s hard to see it not testing that this week, although there remains a decent amount of resistance in the 4175-4200 range. Above that 4231 becomes key (50% retracement of entire decline). As a reminder, once a bear market has reclaimed the 50% level, it has never gone on to break to new lows for that cycle.”