Friday October 23rd


Stock futures rise as traders monitor stimulus talks

U.S. stock index futures rose early Friday as Wall Street weighed the potential for additional fiscal stimulus, as well as news on the earnings and coronavirus treatment fronts. Dow Jones Industrial Average futures rose 100 points, implying an opening gain of about 110 points. S&P 500 and Nasdaq 100 futures gained 0.3% and 0.2%, respectively. Gilead Sciences gained more than 5% in premarket trading after the Food and Drug Administration approved the company’s drug, remdesivir, for use as a treatment against the coronavirus. Intel shares fell more than 9% in premarket trading following the release of mixed quarterly numbers for the chipmaker. The company’s earnings were in line with analyst expectations, but revenue from its data center business fell short of analyst estimates. Futures’ slight move higher came after President Donald Trump and former Vice President Joe Biden took part in the final presidential debate before the Nov. 3 election. The pair discussed a broad range of issues during the debate, including the coronavirus pandemic, foreign policy and health care. Futures, however, remained little changed throughout the debate. Biden held a lead in most national polls heading into the debate as the possibility for a so-called Blue Wave grows. Some investors think a Democratic sweep could lead to a pop in equity prices in the short term. However, legendary hedge fund manager Paul Tudor Jones warned Thursday that this scenario could pressure stocks in the long term. “I think under a blue wave, and the Biden tax plan, financial assets over the long run suffer a great deal,” he said on CNBC’s “Squawk Box.” The Dow and S&P 500 each gained 0.5% during regular trading while the Nasdaq Composite advanced 0.2% after House Speaker Nancy Pelosi signaled she and Treasury Secretary Steven Mnuchin were making progress in their fiscal stimulus negotiations. “If we were not making progress, I wouldn’t spend five seconds in these conversations. … This is not anything other than I think a serious attempt. I do believe that both sides want to reach an agreement,” Pelosi said. However, Pelosi also tempered expectations over Democrats and Republicans reaching a deal before the election, saying it could take “a while” for a bill to be written and signed. Traders have been keeping an eye on Washington in recent weeks as they gauge the prospects for new coronavirus aid to be pushed through. Several market experts and economists, including Federal Reserve Chairman Jerome Powell, think it is imperative that lawmakers reach a deal on another stimulus package. “Governmental powers are still trying to put together another economic relief package,” said Jim Paulsen, chief investment strategist at The Leuthold Group. “However, despite the July expiration of unemployment benefits provided by the CARES Act, here, two-and-a-half months later, U.S. economic momentum is remarkably healthy.” Paulsen’s comment came after the release of much better-than-expected U.S. unemployment data on Thursday. Shares in Asia-Pacific were mixed in Friday trade as investors monitored coronavirus developments. Mainland Chinese stocks led losses among the region’s major markets, with the Shanghai composite closing 1.04% lower at about 3,278 while the Shenzhen component dropped 1.999% on the day to approximately 13,128.46. Hong Kong’s Hang Seng index edged 0.46% higher, as of its final hour of trading. In Japan, the Nikkei 225 rose 0.18% to close at 23,516.59 while the Topix index advanced 0.34% to finish its trading day at 1,625.32. South Korea’s Kospi also rose 0.24% to close at 2,360.81. Oil prices held on to gains made on the previous session on Friday, after Russian President Vladimir Putin indicated he would be prepared to extend record supply cuts in the face of the Covid-19 pandemic. Brent crude was off 1 cent at $42.45 a barrel by 0040 GMT having risen 1.7% on Thursday, while U.S. oil was 2 cents lower at $40.62, following a 1.5% gain in the previous session. Both contracts are heading for their first weekly loss in three. Gold edged up on Friday on hopes that a U.S. stimulus package would eventually be passed, boosting the metal’s appeal as an inflation hedge, although a stronger dollar capped gains. Spot gold rose 0.1% to $1,906.29 per ounce by 0405 GMT, after slipping more than 1% in the previous session. Bullion is up 0.4% this week. U.S. gold futures rose 0.2% to $1,907.50 per ounce.