Thursday May 21st

21-05-2020

Stock futures cut losses even after another 2.4 million works file jobless claims

U.S. stock index futures fell on Friday as investors took a breather from Wall Street’s robust gains so far this week. Dow Jones Industrial Average futures traded 56 points lower, or 0.2%. S&P 500 and Nasdaq 100 futures dropped 0.2% and 0.1%, respectively. MGM Resorts, Ross Stores and Under Armour — all stocks that benefit from the economy reopening —  fell in the premarket Thursday. Best Buy also dropped 3.6% despite better-than-expected earnings. Thursday’s pullback followed sharp rallies in the major stock indexes so far this week. The Nasdaq Composite and S&P 500 both extended week-to-date gains during Wednesday’s regular trading session and finished the day up 2% and 1.6% respectively. The broad S&P 500 closed at its highest level since March 6 on Wednesday afternoon. The Dow, meanwhile, finished Wednesday’s up 369 points, or 1.5%, as Apple, Disney and McDonald’s all added at least 30 points to the blue-chip index amid a surge in reopening optimism. The S&P 500, Nasdaq Composite and Dow are up 3.7%, 4% and 3.7% since Monday. The S&P 500 and Dow are both on track for their best weeks since the week ended April 8. Popular consumer internet names including Facebook and Amazon both clinched new all-time highs on Wednesday as investors cheered the former’s new e-commerce venture and the latter’s continued success in delivering goods to Americans during the Covid-19 outbreak. But investors say the broader strength this week is in large part thanks to state efforts to ease stay-at-home orders and begin lifting restrictions on business. Hopes surrounding a potential Covid-19 vaccine, including a report from Moderna, helped lift stocks to their best day in over a month on Monday. “The broad market has taken some support from positive treatment and vaccine headlines as a complement to a generally more optimistic economic reopening,” LPL Research wrote Wednesday. “The incredible rally off the March 23 lows continues for equities, with the S&P 500 Index now up more than 32% in 40 trading days.” LPL Market Strategist Ryan Detrick did caution, however, that such a comeback is usually accompanied by occasional pullbacks — sometimes as steep as 10% — as investors try to correct sentiment and prices to an appropriate level given bear-market headwinds. On the data front, weekly jobless claims came in at 2.438 million. Economists polled by Dow Jones expected a print of 2.4 million. Last week, the Labor Department reported another 2.9 million Americans had filed claims in the week ended May 9, which brought the coronavirus crisis total to nearly 36.5 million, by far the largest loss in U.S. history. Stocks in Asia Pacific mostly declined on Thursday as investors continued to monitor the reopening of economies amid the coronavirus pandemic. Mainland Chinese stocks dipped on the day, with the Shanghai composite 0.55% lower at around 2,867.92 while the Shenzhen component declined 0.94% to 10,845.40. Hong Kong’s Hang Seng index slipped 0.51%, as of its final hour of trading. In Japan, the Nikkei 225 closed 0.21% lower at 20,552.31 while the Topix index finished its trading day 0.23% lower at 1,491.21. South Korea’s Kospi advanced 0.44% to close at 1,998.31. Oil rose on Thursday to its highest since March, supported by lower U.S. crude inventories, OPEC-led supply cuts and recovering demand as governments ease restrictions on people’s movements imposed due to the coronavirus crisis. Crude prices have slumped in 2020, with global benchmark Brent hitting a 21-year low below $16 a barrel in April as demand collapsed. With fuel use rising and more signs that the supply glut is being tackled, Brent has since more than doubled. Brent crude for July rose 75 cents, or 2.1%, at $36.50 per barrel. U.S. West Texas Intermediate crude climbed 77 cents, or 2.3%, to $34.26. Both benchmarks are at their highest since March 11. Gold slipped 1% on Thursday, drifting away from a 7-1/2 year peak, as the dollar strengthened and hopes of a quick economic recovery dented bullion’s safe-haven appeal. Spot gold was down 1% at $1,732.43 per ounce at 0930 GMT. U.S. gold futures fell 1.1% to $1,733.60 per ounce. The dollar index, comparing the greenback against a basket of rivals, rose 0.4%, making gold more expensive for holders of other currencies.