Panic selling erupted overnight across global equity markets as fears of contagion from the hemorrhaging Turkish lira drove European bourses sharply lower before spilling into US stock futures. Ahead of Friday's cash open, Dow futures are expected to open more than 100 points lower.
The rapidly deteriorating lira -- which crashed 14% to another record low against the dollar -- fueled a feeding frenzy across Europe that was set in motion by a warning from a European Central Bank regulatory committee that several prominent European banks have a worrisome exposure to the collapsing lira and that Turkish borrowers may default on euro-denominated loans.
Selling pressure accelerated when Turkish president Recep Erdogan, in an attempt to soothe financial markets, instead delivered a heavily nationalistic speech that only inflamed risk aversion. Erdogan assured Turks that "if they have dollars, we have our people, our right, our Allah."
Accordingly, the euro fell by more than 1% against the dollar, followed by heavy losses in Germany's DAX, France's CAC and the Euro Stoxx before permeating US markets. The selloff overshadowed a rebound in oil futures and upbeat economic data from the UK. Losses have been heaviest in the tech-heavy Nasdaq with chipmakers leading decliners.
Inflation data released at 8:30am ET resulted in only a slight uptick in stock futures. The consumer price index rose an as-expected 0.2% in July for both the nominal and core. Year-over-year, the nominal CPI was unchanged at 2.9% vs 3.0% estimates while the core increased to 2.4% from 2.3%.
-Dow Jones Industrial down 0.41%
-S&P 500 futures down 0.42%
-Nasdaq 100 futures down 0.49%
Nikkei down 1.33%
Hang Seng down 0.84%
Shanghai Composite up 0.04%
FTSE-100 down 0.87%
DAX-30 down 1.98%
PRE-MARKET SECTOR WATCH
(-) Large cap tech: Lower
(-) Chip stocks: Lower
(-) Software stocks: Lower
(-) Hardware stocks: Lower
(-) Internet stocks: Lower
(-) Oil stocks: Lower
(+/-) Biotech stocks: Flat
(-) Drug stocks: Lower
(-) Financial stocks: Lower
(+) Retail stocks: Higher
(-) Industrial stocks: Lower
(+/-) Airlines: Flat
(-) Autos: Lower
(+) AWX (+48.83%) Reported upbeat Q2 results
(+) MDLY (+42.86%) Agreed to merge with Sierra
(+) TTD (+21.40%) Q2 results beat expectations, issued strong Q3 and FY18 guidance
(-) ELGX (-20.89%) Reported wider-than-expected loss, cuts FY outlook below street
(-) CORT (-16.52%) Q2 results missed estimates, lowers revenue guidance
(-) XONE (-12.61%) Missed Q2 EPS and sales estimates