Monday August 17th

17-08-2020

Stock futures rise slightly following last week’s gains

U.S. stock index futures rose slightly early Monday after Wall Street logged its third consecutive weekly gain, but fell short of breaking the all-time high set on Feb. 19. Dow Jones Industrial Average futures rose about 90 points. S&P 500 and Nasdaq 100 futures popped 0.45% and nearly 0.85%, respectively. The S&P 500 climbed 0.6% last week and the Nasdaq Composite advanced 0.1%. The Dow gained 1.8% last week. Despite those gains, the S&P 500 failed to notch a fresh record high after flirting with the milestone for most of last week. Through Friday’s close, the S&P 500 was just 0.6% below 3,393.52, the intraday record set in February. “The S&P 500 is overbought into key resistance and up against seasonal headwinds,” Ari Wald, head of technical analysis at Oppenheimer, said in a note to clients. But should the market “consolidate from here, we’ll be monitoring for an accumulation of cyclical equities to confirm what we expect to be a breakout to a new high.” Wall Street also grappled with lingering concerns over stalled coronavirus stimulus negotiations and simmering U.S.-China tensions. Both Democrats and Republicans have indicated they are at a stalemate over a new stimulus package. Democrats have proposed to send more than $900 billion to states and municipalities in one bill. A counteroffer from the GOP did not include any additional aid for states and local governments. On Friday, President Donald Trump tweeted: “I am ready to send more money to States and Local governments to save jobs for Police, Fire Fighters, First Responders, and Teachers. DEMOCRATS ARE HOLDING THIS UP!” On the U.S.-China front, Trump issued an executive order on Friday forcing ByteDance to sell or spin off its U.S. TikTok business in 90 days. Trump cited “credible evidence” that ByteDance “might take action that threatens to impair the national security of the United States.” Trump’s order came as the relationship between both countries continues to deteriorate. The U.S. has criticized China over its initial handling of the coronavirus outbreak. Stocks in Asia Pacific were mixed on Monday as tensions between the U.S. and China continue to weigh on investor sentiment. Mainland Chinese stocks were higher on the day. The Shanghai composite jumped 2.34% to about 3,438.80 while the Shenzhen component added 1.877% to approximately 13,742.23. Hong Kong’s Hang Seng index gained 0.65% to close at 25,347.34. Elsewhere, Japan’s Nikkei 225 slipped 0.83% to close at 23,096.75 while the Topix index dipped 0.84% to end its trading day at 1,609.82. Oil prices steadied on Monday as news that China planned to ship large volumes of U.S. crude in August and September countered rising tensions between the two countries and a delay in the review of their trade pact over the weekend. Brent crude was down 13 cents, or 0.3%, to $44.67 a barrel, and West Texas Intermediate crude was down 4 cents, or 0.1%, to $41.97 a barrel. Gold rose on Monday, consolidating near the $1,950 mark after plunging 4.5% last week, buoyed by a weaker dollar as investors await the fine print on the U.S. Federal Reserve’s strategy to stem the economic toll of the coronavirus. Spot gold rose 0.3% to $1,950.16 an ounce and U.S. gold futures gained 0.5% to $1,959.10.