Thursday May 20th

20-05-2021

S&P 500 futures turn positive, tech slated to rebound

U.S. stock index futures turned positive shortly before the opening bell on Thursday with technology stocks set to rebound. S&P 500 futures gained 0.1% and Nasdaq 100 futures traded 0.35% higher. Futures on the Dow Jones Industrial Average fell just 20 points, or 0.1%. In the latest gauge for the pace of labor-market recovery, first-time claims for unemployment benefits for the week ended May 15 came in at 444,000,  the Labor Department reported Thursday. Economist surveyed by Dow Jones had been expecting 452,000 new claims. Shares of Cisco dropped 5% in premarket trading after the tech conglomerate issued weaker-than-expected earnings guidance for the current quarter. The move in futures followed a roller-coaster session on Wall Street triggered by a sudden drop in bitcoin, which led to a sharp sell-off in many speculative areas of the market. Cryptocurrency-linked shares, including Tesla, Coinbase and MicroStrategy, led the market decline as bitcoin tanked as much as 30% at one point Wednesday. After touching nearly $30,000 at its low, bitcoin made back some of those losses later Wednesday. The stock market closed well off its lows as bitcoin rebounded. On Thursday, the cryptocurrency was slightly higher at around $40,000, according to Coin Metrics. Coinbase shares were higher in early trading Thursday after Wedbush said to buy the crypto-exchange despite the volatility. “Crypto, after all, is the poster child for liquidity-induced speculation and the fact that this is now deflating ... lends credence to the sense that risk markets are now starting to adjust to the looming prospect of peak-liquidity,” a JPMorgan strategist said in a note. The S&P 500 slid 1.6% at its session low in the previous session but recouped most of the losses to close down just 0.3% as the bitcoin stabilized. The blue-chip Dow finished the session about 160 points lower after plunging 580 points at one point. The tech-heavy Nasdaq Composite ended the day flat, erasing a 1.7% drop. Thursday was the third straight day of losses for the Dow, which is down 1.4% for the week. The average lost about 1% last week as the market rally to highs stalls. On Wednesday, investors also digested the Federal Reserve’s minutes from April that hinted at considering tapering its asset purchase programs in upcoming meetings. “A number of participants suggested that if the economy continued to make rapid progress toward the Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases,” the Fed minutes said. Kohl’s and Petco’s earnings are set to be released before the bell on Thursday. Stocks in Asia-Pacific were mixed on Thursday, with data showing Japan’s exports surging in April. The Nikkei 225 finished the trading day 0.19% higher at 28,098.25 while the Topix index advanced slightly to 1,895.92. Mainland Chinese stocks were mixed, with the Shanghai composite down 0.11% to 3,506.94 while the Shenzhen component gained 0.35% to 14,535.10. The Hang Seng index in Hong Kong shed 0.5% on the day to 28,450.29.  South Korea’s Kospi declined 0.34% to close at 3,162.28. Oil prices were poised for a third day of losses on Thursday after diplomats said progress was made towards a deal to lift sanctions on Iran, which could boost crude supply. Brent crude was down $1.00, or 1.5%, to $65.66 per barrel. U.S. oil lost 86 cents, or 1.4%, to $62.50 per barrel. Both contracts fell around 3% in the previous session. Gold prices climbed on Thursday, aided by growing U.S. inflationary pressure, although gains were curbed as the dollar rebounded and U.S. Treasury yields rose after Federal Reserve policymakers hinted at a possible shift in future policy. Spot gold was up 0.3% at $1,875.74 per ounce by 0525 GMT. U.S. gold futures eased 0.3% to $1,876.20.