Monday September 28th

28-09-2020

Dow futures surge more than 300 points following a 4-week losing streak

U.S. stock index futures jumped in early trading on Monday following a four-week losing streak on Wall Street. Futures on the Dow Jones Industrial Average pointed to an opening gain of more than 300 points. S&P 500 futures and the Nasdaq 100 futures also traded in positive territory. The S&P 500 and the 30-stock Dow were coming off their fourth straight negative week, shedding 0.6% and 1.8%, respectively. It marked the first time since August 2019 that the two benchmarks suffered a four-week losing streak. The tech-heavy Nasdaq eked out a 1% gain last week, posting its first positive week in four as the technology sector rebounded slightly from the recent deep rout. Shares of technology stocks continued their rebound in premarket trading Monday. Apple gained 2% and Tesla rose 3% in early trading. The pandemic continues to keep investors on edge, but it was unclear whether a rise in cases in certain areas is a sign of a resurgence. New daily coronavirus cases topped 1,000 in New York state on Saturday, marking the first time the state’s new infections have broken the 1,000 threshold since early June. Investors bid up shares on Monday that would benefit from a vaccine and an economic comeback. Carnival Corp and American Airlines were both up more than 4% in premarket trading. Still, major averages are on track to post steep losses for September, a historically weak month for stocks. The Dow and the S&P 500 have fallen 4.4% and 5.8%, respectively, while the Nasdaq has dropped 7.3%. The declines followed a massive comeback from the coronavirus sell-off that saw the S&P 500 climb more than 50% from its March bottom. “September has been rough for U.S. equity markets, particularly the Nasdaq,” wrote Mike Wilson, chief U.S. equity strategist for Morgan Stanley. “We expect it to bleed into October as visible risk events linger. Looking at the micro picture suggests this is just a correction in a new bull market and the best opportunities remain in reopening beneficiaries.” Investors continue to monitor the developments on further fiscal stimulus after negotiations between House Democrats and the Trump administration fell apart in early August. House Speaker Nancy Pelosi said Sunday a last-minute coronavirus aid deal remains on the table as House Democrats try to forge ahead on a smaller aid package costing about $2.4 trillion. The chamber could vote on the bill as soon as next week. Meanwhile, on Saturday, President Donald Trump announced that he will nominate Judge Amy Coney Barrett to fill the vacancy left by the death of Justice Ruth Bader Ginsburg on the Supreme Court. The move sets up a confirmation fight just weeks before Election Day. Hearings to consider Trump’s nominee are set to begin Oct. 12, Senator Lindsey Graham said late Saturday. Hong Kong-listed shares of Chinese chipmaker SMIC fell on Monday following reports that the U.S. has imposed restrictions on exports to the firm due to risks of military use. Shares of SMIC listed in the city fell 3.88% on Monday, against a broader rise in the sector as the Hang Seng Tech index gained 0.86% on the day to 6,978.59. Overall, the Hang Seng index in Hong Kong rose 1.04% to close at 23,476.05. Mainland Chinese stocks lagged on the day, with the Shanghai composite fractionally lower at about 3,217.53 while the Shenzhen component shed 0.415% to around 12,760.93. Elsewhere, in Japan, the Nikkei 225 added 1.32% to close at 23,511.62 while the Topix index gained 1.69% to finish its trading day at 1,661.93. South Korea’s Kospi rose 1.29% to close at 2,308.08. Oil prices were slightly higher on Monday despite rising coronavirus cases that upset hopes for a smooth recovery in fuel demand, with the main crude benchmarks on track for their first monthly falls in multiple months after last week’s slips. Brent crude traded 3 cents higher at $41.95 per barrel, after dropping 2.9% last week. U.S. West Texas Intermediate was at $40.31 a barrel, up 6 cents, following a 2.1% decline last week. Gold fell on Monday as positive economic data from China provided a fillip to risk-sentiment, denting the appeal of the safe-haven metal ahead of the first presidential election debate between U.S. President Donald Trump and Democratic rival Joe Biden. Spot gold fell 0.3% to $1,853.85 per ounce. U.S. gold futures were down 0.5% at $1,856.40.