Friday August 14th

14-08-2020

Stock futures are little changed after mixed U.S. retail sales data

U.S. stock index futures were little changed on Friday as traders pored over mixed economic data to end the week. Dow Jones Industrial Average futures slipped 64 points, or 0.2%. S&P 500 futures were marginally lower and Nasdaq 100 futures climbed 0.3%. Retail sales for July rose 1.2%, the Commerce Department said. That’s below a Dow Jones estimate of 2.3%. Excluding autos, however, retail sales rose 1.9% to top a forecast of 1.2%. Airlines and cruise operators — two groups that would benefit from the economy reopening — slid in premarket trading. United Airlines dipped 1% and Delta was down 1.2%. American Airlines pulled back 1%. Norwegian Cruise Line and Carnival dropped 2.4% and 2.4%, respectively. The S&P closed Thursday’s session down 0.2%. Earlier in the day, it briefly traded above its record closing high of 3,386.15. The gyrations between gains and losses through the day came as tech shares outperformed while names that would benefit from the economy reopening struggled. Facebook, Netflix and Alphabet all closed higher and Apple rallied to an all-time high. Meanwhile, Gap and American Airlines both fell at least 1.8%. JPMorgan Chase slid 0.6%. “The SPX’s negative reversal and its inability to make new highs today will receive many of the headlines. But the day’s intra-day sell off was much less severe than Tuesday’s,” Frank Cappelleri, executive director at Instinet, said in a note. He added Thursday’s fall “did little to alter [its] bullish patterns.” If the S&P 500 breaks out for a fresh record, it would be the index’s fastest recovery from a 30% drop in its history, according to data compiled by Ned Davis Research. The S&P 500 remained 0.7% higher for the week despite Thursday’s decline. The broader market index has rallied more than 50% from an intraday low set March 23. To be sure, sentiment was kept in check as lawmakers seem unable to move forward with a coronavirus stimulus bill. House Speaker Nancy Pelosi, D-Calif., has said she will not restart talks with Republicans on the matter until they increase their aid offer by $1 trillion. White House economic advisor Larry Kudlow also told CNBC’s “Squawk on the Street” that the administration and Democrats were at a “stalemate.” “Given the current fiscal stalemate, it is extremely unlikely that consumers receive any additional fiscal support in August. Needless to say, the outlook for September is highly dependent on fiscal policy,” said Aneta Markowska, chief economist at Jefferies, in a note. Asia-Pacific markets traded mostly higher on Friday but investors remained cautious after U.S. lawmakers seemed unable to move forward with a coronavirus stimulus bill. In Japan, the Nikkei 225 added 0.17% to 23,289.36 while the Topix index gave up earlier gains to finish near flat at 1,623.38. South Korea’s Kospi index declined 1.23% to 2,407.49 and Hong Kong’s Hang Seng index was near flat in late-afternoon trade. Chinese mainland shares rose: The Shanghai composite was up 1.19% at 3,360.1, the Shenzhen component index added 1.49% to 13,489.01 and the Shenzhen composite was up 1.25% at 2,244.17. Oil edged further below $45 a barrel on Friday, giving up some of this week’s gain, under pressure from doubts about demand recovery due to the COVID-19 pandemic and rising supply. Two prominent forecasters, the International Energy Agency and the Organization of the Petroleum Exporting Countries, trimmed their 2020 oil demand forecasts this week. OPEC and its allies are increasing output this month. “Pessimism about this year’s oil demand growth prospects is due to the weakening outlook in the coming months,” said Stephen Brennock of oil broker PVM. “To make matters worse, global oil supply is on the upswing.” Brent crude was 8 cents lower at $44.88, heading for a rise of 0.6% this week. West Texas Intermediate was 3 cents lower at $42.21 per barrel. Gold fell on Friday as a rally in U.S. treasuries and a steady dollar prompted a sell-off in bullion, setting it up for its biggest weekly decline since March following a steep retreat from record peak. Spot gold dipped 0.3% to $1,947.67 per ounce. U.S. gold futures fell 0.7% to $1,956.50 per ounce. Having hit a record peak of $2,072.50 on Friday and posting gains in the previous nine weeks in a row, bullion has declined 4.2% so far this week.