Wednesday September 2nd

2-09-2020

Dow futures jump 130 points, building on Wall Street’s strong start to September

U.S. stock index futures jumped early Wednesday continuing a strong start to September for the market. Dow Jones Industrial Average futures were up 138 points, or 0.5%. The S&P 500 climbed 0.6% and Nasdaq 100 futures advanced 1%. Apple was higher by 2% in premarket trading. The shares gained 4% on Monday, the first day of trading following a 4-for-1 stock split. The major U.S. indexes all rose during Tuesday’s regular session, with the Dow Jones Industrial Average and the Nasdaq Composite closing at record highs. The S&P 500 rose 0.75%, which was its best first trading day of September since 2010, according to Bespoke Investment Group. Tuesday’s rally came after a banner month for the markets, with the Dow and S&P 500 both rising at least 7% to notch their best August in more than 30 years. The Nasdaq outperformed both of them, gaining 9.59% for the month. Morgan Stanley Chief U.S. Equity Strategist Mike Wilson said on “Closing Bell” that he was still optimistic about the market long-term but that weakness in the weeks ahead was on the table after such a strong rally. “I remain very constructive over the next 12 months,” Mike Wilson said. “I think we’re a little bit overcooked ... It’s impossible to try to time these types of corrections,” Wilson said. “It would not surprise me if we got a 10% correction, but it wouldn’t be surprising if we didn’t, either. We’re in a bull market.” In Washington, Congressional leaders appear to be far apart in negotiations for another relief package, but the Trump Administration announced on Tuesday evening that the Centers for Disease Control and Prevention would invoke its authority to halt evictions through the end of the year. The move in futures also followed conflicting news in the fight against the coronavirus, with Swiss pharmaceutical firm Roche announcing that it would launch a new rapid antigen test in Europe by the end of the month. The company said it would apply for an emergency use authorization from the U.S. Food and Drug Administration. However, an expert panel convened by the U.S. National Institute of Health said that a plasma treatment touted by President Trump and FDA head Stephen Hahn does not appear to be effective against Covid-19 based on current research. New data on auto sales pointed to a continued economic recovery, with Autodata saying the pace of sales for August coming in at just over 15 million. The reading was down 11% year-over-year but was the highest rate since February. Investors will be watching the ADP payroll data on Wednesday morning, one of the last reads on the labor market before the official August jobs report is released on Friday. Stocks in Asia Pacific largely rose on Wednesday as data showed Australia’s economy has officially slid into a recession. Elsewhere, mainland Chinese stocks were mixed on the day, with the Shanghai composite down 0.17% to about 3,404.80 while the Shenzhen component added 0.273% to approximately 13,887.43. In Japan, the Nikkei 225 gained 0.47% to close at 23,247.15 while the Topix index ended its trading day 0.47% higher at 1,623.40. South Korea’s Kospi advanced 0.63% to close at 2,364.37. Hong Kong’s Hang Seng index slipped 0.18%, as of its final hour of trading. Crude oil futures extended gains on Wednesday after a bigger-than-expected draw in U.S. crude stockpiles and as solid U.S. and Chinese factory activity fueled optimism of a recovery from the pandemic, boosting investor risk appetite. Brent crude futures rose 28 cents, or 0.6%, to $45.86  extending gains into a third day. U.S. West Texas Intermediate futures rose 23 cents to $42.99 per barrel, following the previous day’s gain by 15 cents. Gold inched lower on Wednesday, after hitting a near two-week high in the prior session, as the dollar rebounded and risk sentiment rose after strong U.S. manufacturing data raised hopes of a swifter global economic recovery. Spot gold fell 0.1% to $1,968.01 per ounce, after hitting its highest since Aug. 19 at $1,991.91 on Tuesday. U.S. gold futures dropped 0.2% to $1,975.10.