Wednesday June 9th

9-06-2021

Stock futures are little changed as S&P 500 remains range-bound near record

U.S. stock index futures tied to the Dow Jones Industrial Average were lower by 7 points. S&P 500 futures added 0.1%, while Nasdaq 100 futures gained 0.3%. Trading was quiet in the premarket though reopening plays like Carnival Corp. and American Airlines gained. Meme stock mania was set to continue Wednesday with day traders now focusing their attention on Clover Health. The stock was up another 23% in premarket trading following an 85% rally on Tuesday amid explosive trading volumes. Wendy’s, another name popular among Reddit traders, gained 25% Tuesday and was higher again in premarket trading Wednesday. The S&P 500 and the blue-chip Dow both closed near the flatline on Tuesday. The broad equity benchmark is now just 0.3% below its record high of 4,238.04 reached on May 7. Investors await the next reading on inflation to gauge if higher price pressures are just temporary as the economy continues to rebound from the pandemic-induced recession. “US stocks have largely been stuck in a range since mid-April and don’t seem likely to be breaking out anytime soon,” Edward Moya, senior market analyst at Oanda, said in a note. “Investors want to see how hot pricing pressures get and how much downside in equities will occur once the Fed’s taper tantrum begins.” The consumer price index for May is set to be released Thursday. Economists are expecting the CPI to rise 4.7% from a year earlier, according to Dow Jones. In April, the CPI increased 4.2% on an annual basis, the fastest rise since 2008. Many on Wall Street believe the latest meme stock episode should stay contained to a handful of names, unlike the GameStop trading frenzy in January that had an impact on the broader stock market. “Given the low risk of a broad contagion, we view the fallout of the recent short squeeze to be limited,” Maneesh Deshpande, global head of equity derivatives strategy at Barclays, said in a note. “The current short squeeze is more localized probably because the number of stocks with high short interest has come down dramatically.” On the data front, job openings in April soared to a new record high, with 9.3 million vacancies coming online amid the economic recovery. Shares in major Asia-Pacific markets were mixed on Wednesday, as investors reacted to the release of Chinese inflation data. Mainland Chinese stocks nudged higher on the day as the Shanghai composite climbed 0.32% to 3,591.40 while the Shenzhen component was marginally higher at 14,718.40. Hong Kong’s Hang Seng index dipped about 0.1%, as of its final hour of trading. In Japan, the Nikkei 225 shed 0.35% to close at 28,860.80 while the Topix index dipped 0.28% to end the trading day at 1,957.14. South Korea’s Kospi also declined 0.97% to close at 3,216.18. Oil prices rose for a second day on Wednesday on signs of strong fuel demand in Europe, while the prospect of a near-term return of Iranian oil supply faded as the U.S. secretary of state said sanctions against Tehran were unlikely to be lifted. Brent crude futures were up 28 cents, or 0.4%, at $72.48 a barrel and earlier rose to $72.58, the highest since May 20, 2019. Brent rose 1% on Tuesday. U.S. West Texas Intermediate (WTI) crude futures jumped 23 cents, or 0.3%, to $70.28 a barrel after rising to as high as $70.42, the most since Oct. 17, 2018. Prices climbed 1.2% on Tuesday. Gold eased on a firmer dollar but held in a tight range on Wednesday as investors awaited U.S. inflation data and the European Central Bank meeting for clues on policymakers’ views on a rise in prices and the future of economic support measures. Spot gold was down 0.3% to $1,887.91 per ounce by 0909 GMT, while U.S. gold futures slipped 0.2% to $1,891.10.