Wednesday June 23rd


Stock futures rise slightly as market’s comeback rally set to continue

U.S. stock index futures inched up on Wednesday, a day after the Nasdaq Composite index hit an all-time high and the S&P 500 closed just shy of one. Futures contracts tied to the Dow Jones Industrial Average advanced 50 points. S&P 500 futures and Nasdaq 100 futures were both about 0.1% higher. Energy names including Exxon Mobil and Chevron climbed in premarket trading as oil prices continued to rise. Brent crude topped $75 a barrel to hit a two-year high on Wednesday. All three major averages finished Tuesday’s session in the green, reversing losses from earlier in the session amid strength in the technology sector. The S&P 500 advanced 0.5%, to close just 0.2% away from a fresh all-time high. The Dow rose 163 points after earlier in the session falling more than 120 points. The Nasdaq Composite was the relative outperformer, hitting a new intraday all-time high and posting a 0.8% gain on the session for a new record close as well. That was the Nasdaq’s first new high since April 29th as investors have started to rotate back into Big Tech shares. Bitcoin staged an impressive comeback on Tuesday that was carrying through on Wednesday. On Tuesday, the cryptocurrency at one point dipped below $30,000 and erased its gains for 2021. But bitcoin ultimately recouped all of the more than 11% loss and finished the session in positive territory, according to data from Coin Metrics. At last check, bitcoin was up another 4% to above $34,000 on Wednesday. Federal Reserve Chairman Jerome Powell testified before the House of Representatives on Tuesday, which appeared to lift sentiment as he reiterated that inflation pressures will be temporary. “Powell outlined how the inflation overshoot is from categories directly affected by reopening,” said Ed Moya, senior market analyst at Oanda. “He noted there is extremely strong demand and that the supply has been caught flat-footed.” For June the S&P 500 and Nasdaq Composite are in the green, rising 1% and 3.6%, respectively. The Dow, however, is in the red for the month amid weakness in Caterpillar and JPMorgan. Looking ahead, UBS said it maintains a “positive tactical view on stocks,” but that gains will be unevenly distributed. “We see potential in regional markets that lagged in the second quarter, particularly China and Japan, as well as among those companies and sectors most exposed to economic reopening, including energy, financials, and US small- and mid-caps,” the firm wrote in a recent note to clients. UBS said investors should take profits in some of the year-to-date winners that might have limited upside ahead, including real estate, consumer discretionary and industrial names. Shares in Asia-Pacific were largely higher on Wednesday, with stocks in Hong Kong leading gains regionally. By the Wednesday market close in Hong Kong, the Hang Seng index surged 1.79% to 28,817.07. Taiwan’s Taiex also saw robust gains, rising 1.53% on the day to 17,336.71. Mainland Chinese stocks closed higher, with the Shanghai composite rising 0.25% to 3,566.22 and the Shenzhen component gaining 1.004% to 14,843.83. Elsewhere, the Nikkei 225 in Japan closed slightly lower at 28,874.89 while the Topix index slipped 0.53% to finish the trading day at 1,949.14. South Korea’s Kospi edged 0.38% higher on the day to 3,276.19. Oil rose above $75 a barrel on Wednesday, reaching its highest since late 2018, after an industry report on U.S. crude inventories reinforced views of a tightening market as travel picks up in Europe and North America. The American Petroleum Institute reported that crude stocks fell by a bigger than expected 7.2 million barrels, two market sources said. Official inventory figures from the Energy Information Administration are due at 1430 GMT. Brent crude rose 63 cents, or 0.8%, to $75.44 by 1200 GMT, having touched its highest since October 2018 at $75.66. U.S. West Texas Intermediate added 51 cents, or 0.7%, to $73.36 and is close to its highest since October 2018. Gold prices rose on Wednesday, propped up by a subdued dollar after U.S. Federal Chairman Jerome Powell signaled interest rates would not be hiked too quickly. Spot gold rose 0.3% to $1,783.60 per ounce by 1156 GMT and U.S. gold futures were 0.3% higher at $1,783.20.