Wednesday February 10th

10-02-2021

Dow futures rebound 100 points as stocks look to resume their February rally

U.S. stock index futures rose early Wednesday with the market set to resume its February rally, as investors assessed a new batch of solid corporate earnings. Dow Jones Industrial Average futures implied an opening gain of more than 100 points. S&P 500 futures gained 0.4% and Nasdaq 100 futures also rose 0.4%. Coca-Cola rose more than 1% in premarket trading after the company topped Wall Street’s estimates for its fourth-quarter earnings with cost-cutting efforts. Under Armour jumped 4.3% after reporting a surprise profit for the holiday quarter as sales were boosted by strong digital growth. Twitter popped 7.7% in early trading after the social media company beat Wall Street’s earnings and revenue expectations. Better-than-expected earnings from Lyft, Cisco Systems, Mattel and Yelp also boosted sentiment on Wall Street. Lyft reported signs of a recovery from the Covid-19 pandemic. Traders will also be watching closely Federal Reserve Chairman Jerome Powell’s speech before The Economic Club of New York at 2:00 p.m. ET. On Tuesday, the 30-stock Dow and the S&P 500 fell slightly, snapping a six-day winning streak. The tech-heavy Nasdaq Composite eked out another record closing high. The small-cap benchmark Russell 2000 gained 0.4% to an all-time high, bringing the index’s weekly gain to nearly 11%. Many investors view small caps as a proxy for an economic recovery from the pandemic. Wall Street is having a strong February with the S&P 500 up more than 5% so far. Investors remained optimistic about additional Covid-19 stimulus. House Democrats unveiled the details of a relief proposal that included $1,400 direct checks with faster phase-outs than previous bills. “The virus is continuing to mutate, vaccines are taking longer than expected to distribute and achieving herd immunity seems as if it will take a lot longer as a result,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “On the bright side, massive fiscal stimulus and an extremely accommodative Federal Reserve should keep equities moving higher while we wait for those setbacks to be resolved.” The consumer price index report is scheduled to be released at 8:30 a.m. ET. Economists expect a consensus 0.3% increase in the index, a measure of inflation, or a year-over-year gain of 1.5%, according to Dow Jones. Excluding food and energy, it is projected to rise by 0.1%. Shares in Asia-Pacific were higher on Wednesday as Chinese stocks led gains among the region’s major markets. By the market close in mainland China, the Shanghai composite gained 1.43% to 3,655.09 while the Shenzhen component advanced 2.122% to 15,962.25. Hong Kong’s Hang Seng index jumped 1.91% to close at 30,038.72. In Japan, the Nikkei 225 advanced 0.19% on the day to 29,562.93 while the Topix index closed 0.27% higher at 1,930.82. South Korea’s Kospi gained 0.52% to finish its trading day at 3,100.58. Oil extended its rally for a ninth day on Wednesday, its longest winning streak in two years, supported by producer supply cuts and hopes that vaccine rollouts will drive a recovery in demand. The American Petroleum Institute said on Tuesday crude inventories fell by 3.5 million barrels, versus expectations for a 985,000-barrel build. The Energy Information Administration’s official stocks report is due at 1530 GMT. Brent crude was up 42 cents, or 0.7%, at $61.51 by after touching a 13-month high of $61.61 earlier in the session. U.S. crude was up 29 cents, or 0.5%, to $58.65, having touched $58.76, also a 13-month high. Gold prices gained for a fourth straight session on Wednesday, propelled by a softer dollar, while hopes a U.S. stimulus package will be passed bolstered the metal’s appeal as an inflation hedge. Platinum prices, meanwhile, hit their highest since February 2015 at $1,213.10 an ounce, and the auto-catalyst metal was last up 3.1% at $1,211.68 on expectations of a demand recovery. Spot gold was up 0.2% to $1,840.96 per ounce at 0944 GMT, U.S. gold futures gained 0.3% to $1,843.40. The dollar slipped to a two-week low against rivals.