Futures trading points to a jittery start for stocks on Friday as they look set to close a lackluster week where earnings worries outweighed economic concerns. The major moving averages are on course to post weekly losses unless some very positive catalysts provide a solid boost in the last trading session of the week.

Notes from Thursday’s trading:

Shares ended Thursday’s session lower as traders digested some mixed earnings reports. Electric vehicle manufacturer Tesla TSLA fell nearly 10% dragging both the Nasdaq Composite and S&P 500 indices.

The major moving averages opened lower and moved broadly sideways into late afternoon trading. Thereafter, the selling intensified, dragging the indices further lower, although they managed to erase some of the losses in the last few minutes of trading.

The weakness was broad based, with consumer discretionary, energy, IT services and IT stocks accelerating the declines.

Analyst Color:

A recession now looks like a foregone conclusion, said Jeffrey Roach, chief economist at LPL Financial, citing the leading indicator index’s decline to levels last seen in November 2020 as the economy reeled from the COVID-19 pandemic had fight.

“Historically, an economic contraction has followed immediately a fall in the LEI of this magnitude,” the economist said.

“Head-faking from last year’s two quarters of negative economic growth and uncertainty from an aggressive Federal Reserve were likely culprits for markets being dragged lower over the past year.”

The good news, however, is that despite the likelihood of a recession later this year, Roach doesn’t expect markets to retest those lows.

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