S&P 500 Futures retrace from one-month low amid mixed clues

• S&P 500 consolidates Tuesday’s heavy losses that slipped below 3,300 to probe early August low.
• Vaccine news triggers risk reset even as AstraZeneca halts trials, China inflation numbers refrained from further disappointment.
• Escalating US-China tussle, increasing odds of delay in the American aid package and Brexit woes still probe the optimists.

S&P 500 Futures pick-up bids near 3,340, up 0.14% on a day, during the early Wednesday. The risk barometer recently gained support from China’s August month inflation data and clues of no major challenges to the coronavirus (COVID-19) vaccine developments. Even so, the major risk catalysts keep suggesting the further weakness of the US equity derivative.

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China’s Consumer Price Index (CPI) and Producer Price Index (PPI) matched forecasts during August. While 2.4% of YoY CPI stays below 2.7% prior, the -2.0% PPI marks an improvement from -2.4% previous readings.

Earlier during the day, the leading COVID-19 vaccine developer AstraZeneca came out with the news suggesting a halt in its trial while citing side effects. However, the company’s official announcement afterward termed it as “routine and voluntary” and favored the risk-reset.

Talking about the negatives, US President Donald Trump’s election campaign seems to target China and hence his pledge to “stand tough” fears market players. Also adding to the risk aversion could be the US ruling party’s push for $300 billion as the COVID-19 aid package that was termed “an insult to American people” by House Speaker Nancy Pelosi. Furthermore, Brexit talks are an extra burden onto the market sentiment as the UK is about to change the Withdrawal Agreement and still pushes the European Union (EU) to agree on a deal before October 15.

Amid all these catalysts, US 10-year Treasury yields remain sluggish around 0.67% while stocks in Asia-Pacific attempts recovery after witnessing the heavy losses during early Asia.

Looking forward, a light calendar will keep the key risk catalysts, mentioned above, on the driver’s seat. Additionally, the performance of the technology and automobile sectors has been crucial off-late and shouldn’t be ignored while taking short-term trade decisions.