Friday August 21st

21-08-2020

Dow futures fall more than 100 points to end a record-setting week on Wall Street

U.S. stock index futures were lower early Friday to end a week that saw the broader market reach a record level. Dow Jones Industrial Average futures traded 177 points lower, or 0.6% lower. S&P 500 futures lost 0.6%. Nasdaq-100 futures were down by 0.5%. Earlier this week, the S&P 500 broke above its late-February high and notched a fresh all-time high. The Nasdaq Composite also hit a record on Thursday. The S&P 500 ended Thursday’s session up 0.4% for the week while the Nasdaq was up over 2% week to date. The lion’s share of those gains has been driven by strong gains in Big Tech stocks. Apple is up nearly 3% this week and became the first publicly traded company in the U.S. to reach a market valuation of $2 trillion. Amazon and Alphabet have rallied over 4% this week and Microsoft is up 2.7% in that time. “These are great companies and they are likely to continue to deliver solid earnings growth, but one has to wonder if there isn’t too much enthusiasm baked into their current stock prices,” said Brian Price, head of investment management at Commonwealth Financial Network. “It would be constructive for the overall health of the stock market if we started to see wider breadth and other sectors showing relative strength.  We’ve had a few minor rallies in cyclical value-oriented sectors off the March lows but none that have been sustainable.” Sentiment has been kept in check this week, however, by mixed economic data and a warning from the Federal Reserve. The Labor Department said Thursday that initial weekly jobless claims came in above 1 million, surpassing a Dow Jones estimate of 923,000. To be sure, continuing claims decreased by more than 600,000. On Wednesday, the Fed released the minutes from its July meeting that said the coronavirus pandemic “would weigh heavily on economic activity, employment, and inflation in the near term.” The latest data on U.S. existing home sales is due for release Friday at 10 a.m. ET. Asia Pacific stocks rose on Friday following the release of mixed U.S. economic data overnight. South Korean markets attempted to bounce from Thursday’s losses as the Kospi gained 1.34% to close at 2,304.59. Shares in the country have seen a choppy trading week as South Korea has seen a recent jump in coronavirus cases. Mainland Chinese stocks were higher on the day. The Shanghai composite advanced 0.5% to about 3,380.68 while the Shenzhen component jumped 1.179% to around 13,478. Hong Kong’s Hang Seng index rose 1.3% to close at 25,113.84. In Japan, the Nikkei 225 rose 0.17% to close at 22,920.30 while the Topix index added 0.3% to end its trading day at 1,604.06. Oil prices edged lower on Friday but held near a five-month high as an easing of coronavirus lockdowns aids a slow recovery in fuel demand while major crude producers seek to limit supply. Brent crude futures were down 65 cents, or 1.4%, at $44.26 a barrel, heading for a 0.9% weekly decline. West Texas Intermediate crude futures were down 60 cents, or 1.4%, at $42.21, but on track for a weekly gain of about 0.9%. Gold eased on Friday as the dollar edged higher, denting bullion’s appeal and setting it on track for a second weekly decline, while lingering concerns over the path to recovery from the coronavirus limited losses. Spot gold was down 0.5% to $1,933.85 per ounce, while U.S. gold futures eased 0.3% to $1,940.00 per ounce. For the week, gold is down about 0.5%, having slumped more than 3% earlier this week.