Wednesday August 26th

26-08-2020

S&P 500 futures are flat after benchmark notches another record

U.S. stock index futures were mixed early Wednesday after the S&P 500 closed at a new record high. Dow futures implied an opening loss of around 26 points. The S&P 500 futures contract stood just above the flatline while Nasdaq 100 futures traded in positive territory. Software company Salesforce reported blowout earnings after the bell on Tuesday. The soon-to-be Dow member rose more than 13% in extended trading after beating on the top and bottom lines of its second-quarter results. Salesforce will replace Exxon Mobil, Amgen will replace Pfizer and Honeywell International will replace Raytheon Technologies in the Dow average, S&P Dow Jones Indices said Monday. The changes are driven by Apple’s coming stock split, which will reduce the technology weighting in the price-weighted average. HP Enterprise, homebuilder Toll Brothers and retailer Urban Outfitters jumped after the bell following their better-than-expected earnings. U.S. durable goods orders jumped by 11.2% in July, easily topping a 4.3% estimate from Refinitiv. On Tuesday, the Dow Jones Industrial Average lost 60 points as Apple, the gauge’s biggest influence, snapped a five-day winning streak. The tech giant closed the session down about 0.8%. The S&P 500 gained 0.36%, to notch its 17th record close of 2020. The Nasdaq Composite also closed at a record after popping 0.76%. Shares of Facebook rose more than 3%. China and the U.S. resumed trade talks on Tuesday. In a statement, the Office of the U.S. Trade Representative said that both sides made “progress and are committed to taking the steps necessary to ensure the success of the” phase one trade deal. Markets were “bolstered by converts finally joining the party, by recent persistent declines in Covid cases, the halo of ongoing new treatments, and renewed progress on trade negotiations with China,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. Later this week, the Federal Reserve will hold its annual symposium on monetary policy. Wall Street will look for clues on further stimulus and where the economy is headed out of the event. Investors will be looking specifically for Powell’s comments on inflation and its impact on the dollar. Shares in mainland China led losses among Asia Pacific’s major markets on Wednesday in a mixed trading day regionally. Mainland Chinese stocks led losses among the region’s major markets, with the Shanghai composite down 1.3% to close at about 3,329.74 while the Shenzhen component declined 1.763% to finish its trading day at around 13,428.40. Hong Kong’s Hang Seng index was little changed on the day at 25,491.79. Elsewhere, the picture was more mixed. In Japan, the Nikkei 225 closed little changed at 23,290.86 while the Topix index finished its trading day slightly lower at 1,624.48. South Korea’s Kospi rose 0.11% to close at 2,369.32. Oil held near $46 a barrel on Wednesday, close to its highest since March, lifted by U.S. producers shutting most of their offshore Gulf of Mexico output ahead of Hurricane Laura and a report showing a drop in U.S. crude inventories. Renewed worries over the COVID-19 pandemic, which has squeezed demand and sent prices to record lows in April, capped gains after reports this week of patients being re-infected, raising concerns about future immunity. Brent crude slipped 11 cents, or 0.24%, to $45.75 a barrel, while West Texas Intermediate crude fell 15 cents, or 0.35%, to $43.20. Both benchmarks settled at a five-month high on Tuesday. Gold was little changed on Wednesday, as worries over global economic outlook offset pressure from signs of progress in U.S.-China trade negotiations, while investors await a speech from U.S. Federal Reserve Chairman Jerome Powell. Spot gold was flat at $1,928.35 per ounce by 0306 GMT. U.S. gold futures rose 0.6% to $1,934.70.