Thursday June 4th

4-06-2020

Dow futures are down 100 points again after disappointing US jobless claims data

U.S. stock index futures fell on Thursday as Wall Street takes a breath following a blistering start to June. Dow Jones Industrial Average futures traded 109 points lower, or 0.4%. S&P 500 and Nasdaq 100 futures slid 0.5% and 0.2%, respectively. U.S. markets kicked off June with the Dow rising 3.49% over the first three trading days of the month. The S&P 500, meanwhile, posted Wednesday its longest winning streak since February. The Nasdaq 100 index, which tracks the 100-largest nonfinancial companies in the Nasdaq Composite, stands 0.3% below a record set on Feb. 19. The index has rallied more than 43% from an intraday low set on March 23. The Nasdaq Composite, meanwhile, is just 1.58% below its all-time high. “May could well end up being the turning point for the viral crisis. The month ended with the virus seemingly under control and with the economy reopening faster than expected,” wrote Brad McMillan, chief investment officer at Commonwealth Financial Network. “June will tell us whether that trend continues. But right now? Things look much better than we could have expected a month ago.” Futures were also under pressure on the back of disappointing U.S. jobless claims data. The Labor Department said 1.877 million Americans filed for unemployment benefits last week, topping a Dow Jones estimate of 1.775 million. Continuing jobless claims rose sharply, nearly reaching 21.5 million. To be sure, losses were kept in check after the European Central Bank said Thursday it will increase its Pandemic Emergency Purchase Programme by 600 billion euro, bringing the program’s total to more than 1 trillion euro. The ECB’s stimulus measures come as the Federal Reserve and other central banks around the world take action to curb the economic blow from the coronavirus pandemic. These measures, along with hopes of the global economy reopening, have lifted equity prices around the world. The iShares MSCI ACWI ETF — which tracks stocks globally — has rallied more than 40% since hitting an intraday low on March 23. The S&P 500, meanwhile, is up over 42% in that time. The market is “focusing on signs that a reopening recovery—juiced by federal spending and monetary easing—is taking hold,” said Ed Yardeni, president and chief investment strategist at Yardeni Research. “The market is treating the recent calamity as if it were a natural disaster rather than a severe recession.” Stocks in Asia were mixed on Thursday as investors assessed the prospects of economic recovery from the coronavirus pandemic. In Japan, the Nikkei 225 rose 0.36% to close at 22,695.74 while the Topix index ended its trading day 0.3% higher at 1,603.82. South Korea’s Kospi also closed 0.19% higher at 2,151.18, adding to its nearly 3% Wednesday gains. Mainland Chinese stocks were mixed on the day, with the Shenzhen component up 0.278% to about 11,139.26. The Shanghai composite, on the other hand, shed 0.14% to around 2,919.25. Hong Kong’s Hang Seng index was 0.27% lower, as of its final hour of trading. Oil prices dropped on Thursday on doubts over the ability of crude producers to agree to extend record output cuts, heightened by worries over a build in U.S. fuel inventories. Brent crude futures eased by 29 cents to $39.50 a barrel, heading for its first fall in six sessions. U.S. West Texas Intermediate crude futures dropped 58 cents to $36.71. Gold rose on Thursday as investors took advantage of the previous session’s steep price decline to buy the metal, with markets awaiting the release of Friday’s U.S. non-farm payrolls data for May. Spot gold rose 0.9% to $1,713.37 per ounce . U.S. gold futures climbed 0.8% to $1,719.10.