Wednesday August 12th

12-08-2020

Stock futures point to a rebound after S&P 500 snaps 7-day winning streak, Dow futures up 290

U.S. stock index futures rose and pointed to a rebound at the open on Wednesday after the S&P 500 closed lower for the first time in eight days. Dow futures were higher by 295 points, or 1.1%. S&P 500 futures added 0.8%. Nasdaq-100 futures were higher by 0.6%. The S&P 500 flirted with an all-time high on Tuesday before a late-day sell-off led by tech shares knocked the benchmark down. The S&P 500 is 1.8% from its February record. After the bell on Tuesday, President Donald Trump said the U.S. government will purchase 100 million doses of Moderna’s experimental coronavirus vaccine, which is currently in late-stage human trials. Vaccine hopes lifted shares of cruise lines and airlines in premarket trading Wednesday. Carnival and United shares each rose 2% in premarket trading. A return of risk appetite following encouraging economic numbers and hopes of new coronavirus relief package and even a vaccine boosted the 500-stock index for much of the trading day on Tuesday.  However, the S&P 500 ended the day down 0.8% — snapping a seven-day winning streak — as technology stocks dropped. The S&P 500 has rallied more than 52% since its March low. Key tech shares were rebounding Wednesday morning. Apple and Microsoft were up 1% in the premarket. “A combination of the S&P 500 Index making its first real attempt at an all-time record high after seven straight days of advances, its old leadership — technology and FANNGs — continuing a recent trend of struggling and another day without an agreement nor even renewed talks in DC regarding a new stimulus package finally caught up with the stock market,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. “The first signs of trouble today brought a lot of selling by investors anxious to lock-in recent gains.” Investors are also juggling uncertainty over a second coronavirus stimulus bill. Over the weekend, Trump signed four executive orders to extend some coronavirus aid. Treasury Secretary Steven Mnuchin said Monday the White House is open to resuming coronavirus aid talks with Democrats and putting more relief money on the table to reach a compromise. The Labor Department released key data on Wednesday that showed core consumer prices rose at a much faster-than-expected rate last month. Core CPI jumped 0.6% in July, while economists expected a gain of 0.2%. Asia-Pacific markets recovered slightly from earlier losses in afternoon trade, as investors continue to monitor coronavirus developments. Russia claimed to have developed the first vaccine in the world, while the U.S. was in a stalemate over virus aid talks. Mainland Chinese stocks pared some losses by the close. The Shanghai composite fell 0.63% to close at 3,319.27, while the Shenzhen composite was down 1.26% to 2,215.12. The Shenzhen component tumbled 1.17% to close at 13,308.52. Hong Kong’s Hang Seng index rose 1.21% in the afternoon. In South Korea, the Kospi erased earlier losses, rising 0.57% to close at 2,432.35. Australia’s S&P/ASX 200 lost 0.11% to close at 6,132.00. Japan’s Nikkei 225 traded higher by 0.41% to close at 22,843.96, while the Topix rose 1.23% to 1,605.53. Oil prices rose on Wednesday after an industry report showed U.S. crude inventories last week fell more than analysts had expected, bolstering hopes that fuel demand in the world’s biggest economy can weather the coronavirus pandemic. Brent crude was up 61 cents, or 1.4%, at $45.11 a barrel, after falling around 1% on Tuesday. West Texas Intermediate oil was up 59 cents, or 1.4%, at $42.20 a barrel, having dropped 0.8% in the previous session. Gold clawed back some lost ground on Wednesday, after sinking 6% in the previous session, as equities stalled on doubts over an additional round of U.S. fiscal stimulus and rising Sino-U.S. tensions. Spot gold was up 0.5% at $1,920.04 per ounce by 0045 GMT, having suffered its largest one-day drop in more than seven years on Tuesday due to a bounce in risk appetite and firmer dollar. U.S. gold futures fell 0.7% to $1,930.70.