Wednesday June 24th


Dow futures drop 200 points as coronavirus cases continue to rise

U.S. stock index futures pointed to a lower open on Wednesday as traders grew worried about the increasing number of newly confirmed coronavirus cases. Dow Jones Industrial Average futures dipped 200 points, suggesting an opening loss of about 205 points when regular trading resumes at 9:30 a.m. S&P 500 and Nasdaq-100 futures slid 0.7% and 0.4%, respectively. “Stock futures are trading lower this morning and safe haven assets, including gold, are rallying as new coronavirus cases continue to rise around the world, weighing on the prospects for a continued rebound in the global economy,” said Tom Essaye of The Sevens Report. Shares of companies primed to benefit from the economy reopening faltered in premarket trading. United Airlines fell 3.2%. Delta, American and Southwest all slid over 2%. Carnival, Norwegian Cruise Line and Royal Caribbean were lower by 5.1%, 4.1% and 3.9%, respectively. Retailer Gap also fell more than 2%. A CNBC analysis of Johns Hopkins University data found the U.S. 7-day average of coronavirus cases surged more than 30% from a week ago. California is one of the states that has seen a dramatic spike in cases, adding more than 6,000 on Monday alone. Overseas, Germany reported a cluster of newly confirmed cases at a slaughter house in Lower Saxony. That’s the latest in a series of coronavirus outbreaks in Germany. This led investors to increase exposure to traditional safe-haven assets such as gold. The precious metal rose 0.4% to trade at $1,788.30 per ounce. Wall Street was coming off a banner day, with the Nasdaq Composite posting its 21st closing record for 2020 on Tuesday. The Nasdaq’s gain on Tuesday also represented its eighth straight day of gains, its longest winning streak since December, when it advanced for 11 straight sessions. Shares of consumer technology company Apple rose 2.1% on Tuesday to reach a new all-time high, notching the benchmark one day after it unveiled new operating systems for its iPhone and computers. Apple pleased its investors further by announcing it will phase one Intel chips in favor of its own products when building new Mac devices. Stocks in Asia Pacific mostly edged higher on Wednesday, as Hong Kong-listed shares of Chinese tech juggernaut Tencent slipped from record highs seen earlier in the day. Over in South Korea, the Kospi rose 1.42% to close at 2,161.51. Over in Hong Kong, the Hang Seng index closed 0.5% lower at 24,781.58, as Tencent’s stock slipped 1.33% on the day after earlier touching a new record high. Mainland Chinese stocks were higher by their market close, with the Shanghai composite up 0.3% to about 2,979.55 while the Shenzhen component gained 0.165% to around 11,813.53. In Japan, the Nikkei 225 was fractionally lower on the day at 22,534.32 while the Topix index shed 0.42% to close at 1,580.50. Oil prices fell on Wednesday, reversing the previous session’s surge, as record high inventories and worries about a second wave of the coronavirus pandemic outweighed support from a gradual reopening of global economies. Brent crude fell 72 cents, or 1.7%, to trade at $41.91 per barrel a day after hitting its highest level since a price plunge began in March. The benchmark crude has climbed from below $16 in April but remains a third lower than its level at the end of 2019. West Texas Intermediate crude fell 80 cents, or 1.96%, to $39.58 a barrel. Gold surged to its highest in nearly eight years on Wednesday as rising coronavirus cases globally dented hopes of a rapid economic recovery and pushed investors towards safe haven assets. Spot gold prices climbed 0.6% to $1,777.53 per ounce, having earlier hit their highest since October 2012 at $1,779.06. U.S. gold futures gained 0.7% to $1,794.60.