Friday May 22nd

22-05-2020

Stock futures rise slightly as Wall Street wraps up a winning week

U.S. stock index futures rose slightly early Friday as Wall Street wrapped up a winning week. Dow Jones Industrial Average futures added 48 points, or 0.2%. S&P 500 futures gained 0.2% and Nasdaq 100 futures traded flat. Futures cut their losses and gained as shares of Moderna, a maker of a coronavirus vaccine candidate, rose. Dr. Anthony Fauci told NPR Friday morning that the company’s vaccine data looked “promising.” Moderna rose 5% in premarket trading. Gains were capped on increasing tensions with China. Overnight, China released draft legislation over new national security measures on Hong Kong after last year’s burst of anti-government protests in the city. That law is expected to increase Beijing’s hold over Hong Kong. China also opted against setting a GDP target for 2020 as the coronavirus batters the second-largest economy in the world. That proposal was unveiled after the Senate passed a bill earlier in the week that would potentially delist Chinese stocks from U.S. exchanges. Ed Mills, Washington policy analyst at Raymond James, said the bill is moving at “warp speed,” noting: “We believe there will be a significant push for the legislation to be taken up in the coming weeks, and we believe it is only a matter of time before this bill (or something similar) is signed into law.” Still, the major averages remained on pace for solid weekly gains. The Dow was up more than 3% week to date.  The 30-stock Dow was headed for its biggest one-week gain since the week of April 9. The S&P 500 has gained 2.96% this week while the Nasdaq Composite is up 3% in that time. Those weekly advances come amid optimism around the global economy reopening as well as rising hopes for a coronavirus vaccine. “The future remains uncertain, and thus, we are not confident in saying a second wave cannot happen -- but the good news, there has yet to be a second wave in re-opened economies,” said Tom Lee, founder and head of research at Fundstrat Global Advisors, in a note. “We remain in the half-full camp and believe stocks offer pretty good risk/reward, even here.” The S&P 500 has skyrocketed more than 34% since hitting an intraday low on March 23, led in part by strong gains from major tech stocks. President Donald Trump also said Thursday night “we are not closing our country” if a second wave of coronavirus infections hits the U.S. “We can put out the fires. Whether it is an ember or a flame, we are going to put it out. But we are not closing our country.” Stocks in Asia Pacific fell on Friday as rising tensions between the U.S. and China weighed on investor sentiment. Hong Kong’s Hang Seng index led losses among the region’s major markets as it plummeted 5.56% to close at 22,930.14. Mainland Chinese stocks also declined on the day, with the Shanghai composite down 1.89% to approximately 2,813.77 while the Shenzhen component shed 2.22% to 10,604.97. Elsewhere, the Nikkei 225 in Japan closed 0.8% lower at 20,388.16 while the Topix index ended its trading day 0.9% lower at 1,477.80. Over in South Korea, the Kospi fell 1.41% to close at 1,970.13. Oil prices slumped on Friday after China’s decision to omit an economic growth target for 2020 renewed concerns that the fallout from the coronavirus pandemic will continue to depress fuel demand in the world’s second-largest oil user. Brent crude fell $1.70, or 4.7%, to $34.36 a barrel, after gaining nearly 1% on Thursday. West Texas Intermediate crude dropped by $1.91, or 5.6%, to $32.01 a barrel, having gained more than 1% in the last session. Gold prices rebounded on Friday as escalating tensions between the United States and China lifted bullion’s safe-haven appeal, though a stronger U.S. dollar kept gains in check. Spot gold was up 0.4% at $1,732.60 per ounce, after falling 1.4% on Thursday. U.S. gold futures rose 0.7% to $1,734.