Tuesday September 29th


U.S. stock futures are little changed following Monday’s rally

U.S. stock index futures traded near breakeven early Tuesday ahead of the first U.S. presidential debate. Futures for the Dow Jones Industrial Average were up just 18 points, or 0.1%. S&P 500 futures were also up 0.1% while Nasdaq 100 futures traded marginally lower. The quiet move in futures follows a solid start to the week for stocks during Monday’s session, with the Dow rising 410 points, or 1.5%. The S&P 500 and Nasdaq rose 1.6% and 1.9%, respectively. Monday’s rally set up the market to snap losing streaks. The Dow and the S&P 500 have fallen for four consecutive weeks. The Nasdaq Composite managed to break its own three-week streak with a 1% gain last week. David Waddell, CEO of wealth strategist firm Waddell & Associates, said that he saw recent weakness for the market as a needed “comeuppance” for major tech stocks and that stocks were set for near-term volatility while the indexes treaded water. “I think we’re in a sideways period. It’s just we’re going to do it like we’re on a trampoline,” Waddell said. The strategist also said his clients still had a large amount of their assets in cash, suggesting potential support for the market. Political news is poised to potentially be a major driver of market news this week, with the first debate between President Donald Trump and Democratic nominee Joe Biden set for Tuesday night. Some Wall Street analysts believe the first debate of this cycle could be more consequential for the markets than most debates, with a clear victory by one candidate possibly creating significant market moves. House Speaker Nancy Pelosi said on Monday night that the Democrats were unveiling a new $2.2 trillion stimulus package, smaller than the more than $3 trillion proposed earlier in the crisis but still well above what Republican leaders have offered. The new bill would include enhanced unemployment benefits and aid to airlines and state and local governments, according to a summary. The climb for stocks on Monday came after mixed news about the coronavirus response over the weekend. On the bullish side for the market, Florida lifted capacity restrictions on restaurants over the weekend and Pelosi said she believed another relief bill was still on the table. However, cases in the U.S. continued to rise once again, with Dr. Anthony Fauci saying on Monday that the U.S. is “not in a good place” as colder weather approaches. Before the debate kicks off, investors will get a close look at the state of the semiconductor industry when Micron reports its fiscal fourth-quarter results after the bell on Tuesday. The stock gained 1.2% on Monday despite receiving a “negative catalyst watch” from Citi. By Hong Kong’s market close on Tuesday, shares of logistics provider ZTO Express jumped more than 9% from the offer price of 218 Hong Kong dollars ($28.13) per share. The firm is the latest U.S.-listed Chinese company to debut in the city. Meanwhile, the Hang Seng index in Hong Kong dipped 0.85% to close at 23,275.53. Mainland Chinese stocks were higher, with the Shanghai composite up 0.21% to about 3,224.36 while the Shenzhen component added 1.095% to approximately 12,900.70. In South Korea, the Kospi rose 0.86% to close at 2,327.89. Over in Japan, the Nikkei 225 advanced 0.12% to close at 23,539.10 while the Topix index dipped 0.23% to end its trading day at 1,658.10. Oil prices fell on Tuesday, paring gains from the previous session, as persistent demand concerns due to the coronavirus pandemic outweighed hopes for a new U.S. stimulus package. More than 1 million people have died of Covid-19 as of Tuesday, a Reuters tally showed, with fatalities and infections surging in several countries. U.S. West Texas Intermediate crude futures dropped 21 cents, or 0.52%, to $40.39. The more-active Brent crude futures for December fell 19 cents, or 0.4%, to $42.68 a barrel. The November contract, which expires on Wednesday, fell 13 cents to $42.30 per barrel. Gold inched up to touch its highest in almost a week on Tuesday, supported by a pull-back in the dollar, as investors waited for the first U.S. presidential debate and further developments on a new U.S. coronavirus relief bill. Having risen as high as $1,886.86, spot gold was up 0.1% at $1,883.55 per ounce, while U.S. gold futures rose 0.4% to $1,889.30.