Wednesday May 13th

13-05-2020

US stock futures gain following losses in the previous session, tech shares rise

U.S. stock index futures were higher on Wednesday, pointing to a rebound from a sharp sell-off in the previous session. Dow Jones Industrial Average futures climbed 183 points, or 0.8%. Futures for the S&P 500 jumped 0.7%. Nasdaq 100 futures climbed 0.9%. Big technology stocks were higher in premarket trading Wednesday as investors continued to bet their revenue would be relatively resilient through the pandemic. Shares of Microsoft, Facebook, Alphabet and Apple were higher in premarket trading. Traders will be looking for clarity on future Federal Reserve actions when Fed Chairman Jerome Powell speaks on current economic issues at 9 a.m. ET. Powell’s “comments tomorrow are going to be scrutinized by the market to see how he plans thwart the issue of negative interest rates,” said Quincy Krosby, Prudential chief market strategist. Stocks fell on Tuesday, after spending much of the session around the flatline, as investors parsed through the latest developments surrounding the economy reopening. The Dow Jones Industrial Average lost more than 450 points, reversing its 160 points gain earlier in the day. The S&P 500 also registered a steep loss, dropping 2.05%. Stocks poised to benefit from economies reopening — retail, real estate, banks and airlines — dragged down the major averages. Disney fell 3%, Nike dropped 2.9% and JPMorgan lost 3.3%. Mall operator Simon Property Group gave up a 10% gain to close in the red. Some of those stocks, including Disney, were rebounding in premarket trading Wednesday. “You have a market just waiting to see how the economy opens,” said Krosby. “After nearly six sessions of the market moving higher, you’ve got the S&P 500 at an important technical level, which is 3,000, and it needs a catalyst to climb above that. One of the main catalysts will be if the economy can open up without an increase in cases.” The Nasdaq Composite snapped its six-session winning streak on Tuesday, as investors cooled off from buying technology stocks. The average lost 2.06%; however, it just barely held its positive year-to-date gain of 0.3%. Apple and Microsoft lost 1.1% and 2.3%, respectively. Netflix fell 2% and Amazon dropped 2.2%. Dr. Anthony Fauci said Tuesday that a vaccine will be essential in stopping the coronavirus spread, but warned it will be a while before a usable one is available. Fauci added the U.S. could face more “suffering and death” if states start to reopen too quickly. Stocks in Asia Pacific were little changed on Wednesday as caution remained over a recent resurgence in coronavirus cases in certain countries regionally as they start to reopen their economies. Mainland Chinese stocks nudged higher on the day, with the Shanghai composite up 0.22% to about 2,898.05 while the Shenzhen composite added 0.669% to around 1,822.85. Hong Kong’s Hang Seng index was largely flat, as of its final hour of trading. In Japan, the Nikkei 225 declined 0.49% to close at 20,267.05 while the Topix index also shed 0.14% to end its trading day at 1,474.69. South Korea’s Kospi closed 0.95% higher at 1,940.42. Oil prices reversed losses and turned positive on Wednesday after Saudi Arabia and Russia said in a statement that they are committed to oil market stability. U.S. crude gained 17 cents to trade at $25.95 per barrel, while Brent crude rose 16 cents to $30.14 per barrel. But concerns over a second wave of coronavirus cases capped upside gains. Gold rose slightly on Wednesday as market participants awaited a speech by Federal Reserve Chairman Jerome Powell amid rising speculation the United States could one day adopt negative interest rates. Spot gold was up 0.2% at $1,706.02 per ounce. U.S. gold futures climbed 0.3% to $1,712.60 per ounce.