Thursday August 20th

20-08-2020

Stock futures fall as Nvidia shares decline, jobless claims come in worse than expected

U.S. stock index futures fell Thursday, a day after the S&P 500 touched briefly another record high, amid disappointing economic data as the coronavirus pandemic drags on. Dow Jones Industrial Average futures fell 116 points, or 0.4%. The move indicated a loss of about 100 points at the open. S&P 500 futures shed 0.4%. Nasdaq-100 futures dipped 0.1%. U.S. weekly jobless claims totaled 1.106 million last week, the Labor Department reported. Economists polled by Dow Jones estimate that 923,000 first-time applicants filed for unemployment benefits during the week ended Aug. 15. In the week prior, the tally had dropped below 1 million for the first time since mid-March. However, continuing claims, which refer to those receiving unemployment benefits for at least two straight weeks, continued to decline. They fell by 636,000 to 14.844 million in the week ending Aug. 8. Nvidia shares pulled back by 0.7% in premarket trading even after reporting blowout results. A better-than-expected 50% jump in revenue last quarter still wasn’t enough to lift the stock, which has doubled this year. Investors are growing concerned about valuations for high flying tech shares. Intel shares gained 3.9% after the company announced an accelerated buyback plan, calling its stock cheap. Futures pared some of their losses after the announcement of imminent trade talks between the U.S. and China. China’s commerce ministry announced early on Thursday that Washington and Beijing will be back around the negotiating table in the coming days, thinning the earlier losses in premarket trade. The S&P 500 touched a record high during the Wednesday’s regular session, but then closed lower after the Federal Reserve released its July meeting minutes which said, “the ongoing public health crisis would weigh heavily on economic activity, employment, and inflation in the near term.” On Wednesday, the S&P 500 fell 0.4% to 3,374.85 while the Dow Jones Industrial Average slid 85.19 points, or 0.3%, to close at 27,692.88. The Nasdaq Composite lagged, falling 0.6% to 11,146.46. The Fed’s comment knocked the S&P 500 from a new intraday record set on Wednesday. The benchmark closed at a new record high on Tuesday, confirming the start of a new bull market. The Dow and Nasdaq also turned negative after the minutes were released. Apple made history on Wednesday as the iPhone maker became the first U.S. company to reach a market cap of $2 trillion. With that milestone, Apple officially doubled its valuation in just over two years. The stock is up nearly 60% in 2020 and remains responsible the market’s rally off its springtime low. Apple shares were higher slightly in premarket trading Thursday. Stocks in Asia Pacific fell on Thursday afternoon trade as China kept its benchmark lending rate on hold. South Korean stocks were among the biggest losers regionally, with the Kospi dropping 3.66% to close at 2,274.22. Over in Taiwan, the Taiex slipped 3.26% to end its trading day at 12,362.64. Hong Kong’s Hang Seng index dropped 1.83%, as of its final hour of trading. Mainland Chinese stocks were lower on the day, with the Shanghai composite down 1.3% to about 3,363.90 while the Shenzhen component shed 1.186% to around 13,320.92. In Japan, the Nikkei 225 slipped 1% to close at 22,880.62 while the Topix index shed 0.9% to finish its trading day at 1,599.20. Oil prices fell on Thursday as major producers warned of a risk to demand recovery if the coronavirus crisis is prolonged, while U.S. crude inventories dropped less than expected. Brent crude was down 47 cents, or 1%, at $44.90 a barrel, having slipped 0.2% in the previous session. U.S. oil was down 43 cents, or 1%, at $42.50 a barrel, after inching higher on Wednesday. Gold rose on Thursday, regaining ground from a more than 3% slide the previous session after the U.S. Federal Reserve minutes highlighted the uncertainties surrounding economic recovery from a pandemic-induced slump and dented risk appetite. Minutes from the U.S. central bank’s last policy meeting showed policymakers were concerned the economy faced a highly uncertain path and more monetary support may be needed. But policymakers downplayed the need for yield caps and targets. Spot gold rose 0.2% to $1,933.90 per ounce by 0920 GMT. U.S. gold futures fell 1.6% to $1,939.50.