Tuesday June 1st

1-06-2021

The Dow is set to jump 250 points as June begins, S&P 500 nears a record

U.S. stock index futures climbed on Tuesday as enthusiasm about the economic reopening appeared set to lift the S&P 500 to near a record. Futures tied to the Dow Jones Industrial Average rose 250 points, or 0.7%. The move implied an opening gain of about 260 points. S&P 500 futures gained 0.5%, putting the benchmark closer to its record. On Friday, the S&P 500 closed just 0.8% away from an all-time high. Nasdaq 100 futures added 0.4%. The gains came as Covid cases continue to decline in the U.S. as vaccination rates rise. In a major milestone, more than half the U.S. population has received at least one dose of a Covid vaccination, according to CDC data posted Sunday. More than 62% of adults have received at leased one dose, the CDC said. There were just 12,663 new cases on Saturday, according to the CDC, the lowest since March 2020. Stocks linked to a reopening economy led the gains in the premarket. Share of Carnival Corp and Norwegian Cruise Line Holdings jumped more than 2% apiece. American Airlines and United airlines gained more than 1.5% each. Boeing gained 1.9% before the bell after one analyst recommended investors discount near-term hurdles for the aircraft maker and buy the stock while it’s still below where it traded in early 2020. Energy stocks gained as U.S. oil futures jumped nearly 3% to above $68 a barrel. Exxon, Chevron and Marathon Petroleum gained in premarket trading as the summer travel season kicked off. Meme stock AMC Entertainment was jumping again after selling $230.5 million in new stock to an investor. The shares were up 17% in premarket trading after doubling last week. The moves in overnight trading come after the blue-chip Dow and the S&P 500 gained 1.93% and 0.55% in May, respectively, to mark their fourth consecutive positive month. The small-cap Russell 2000 rose 0.11% in May to post its eighth positive month in a row — its longest monthly win streak since 1995. The Nasdaq gained 2.06% last week to post its best weekly performance since April. However, the tech-heavy composite lost 1.53% in May, breaking a 6-month win streak. The stock market was closed Monday for Memorial Day. A key inflation gauge — the core personal consumption expenditures index — rose 3.1% in April from a year earlier, faster than the forecasted 2.9% increase. Despite the hotter-than-expected inflation data, treasury yields fell on Friday. “Overall, given the market’s reaction to [Friday]’s PCE release, investor concerns about inflation may have been exaggerated — or perhaps already priced in,” Chris Hussey, a managing director at Goldman Sachs, said in a note. “Consensus may be building that the inflation we are seeing today is ‘good’ inflation — the kind of rise in prices that accompanies accelerating growth, not a monetary policy mistake,” Hussey said. Investors are awaiting the Federal Reserve’s meeting scheduled for June 15-16. Key for the markets is whether the Fed begins to believe that inflation is higher than it expected or that the economy is strengthening enough to progress without so much monetary support. May’s employment report, set to be released on Friday, will provide a key reading of the economy. According to Dow Jones, economists expect to see about 674,000 jobs created in May, after the much fewer-than-expected 266,000 jobs added in April. Zoom Video Communications and Hewlett Packard Enterprise are set to report quarterly earnings results on Tuesday after the bell. Shares in major Asia-Pacific markets were mostly higher on Tuesday, as investors reacted to the release of a private survey on Chinese manufacturing activity in May. Mainland Chinese stocks closed higher, with the Shanghai composite up 0.26% to 3,624.71 and the Shenzhen component rising 0.256% to 15,034.78. Hong Kong’s Hang Seng index rose about 0.9%, as of its final hour of trading. Japan’s Nikkei 225 slipped 0.16% to close at 28,814.34 while the Topix index edged 0.17% higher to finish the trading day at 1,926.18. South Korea’s Kospi closed 0.56% higher at 3,221.87. Oil prices rose on Tuesday, with Brent topping $70 and trading at its highest since March, as optimism grew over the fuel demand outlook during the summer driving season of the United States, the world’s top oil consumer. Prices were also boosted after data from China  showed that factory activity expanded at its fastest this year in May. Brent crude futures for August gained $1.50, or 2.15%, to trade at $70.81 per barrel. U.S. West Texas Intermediate crude for July was at $68.21 a barrel, up $1.88, or 2.8% from Friday’s close, with no settlement price for Monday due to a U.S. public holiday. Brent earlier hit a session peak of $70.34, the highest intraday price since March 8. Gold scaled a near five-month peak on Tuesday on support from a weaker dollar and growing concerns over inflation, with investors awaiting key U.S. data due later this week to gauge the extent of economic recovery. Spot gold rose 0.2% to $1,911.02 per ounce, having earlier touched its highest since Jan.8 at $1,916.4. U.S. gold futures were up 0.4% at $1,913.60.