Thursday May 28th

28-05-2020

Dow futures edge higher after blue-chip index rallies back above 25,000

U.S. stock index futures edged higher early Thursday as investors looked to add to Wall Street’s robust gains so far this week. Dow Jones Industrial Average futures were up 118 points, or 0.5%. S&P 500 futures gained 0.1% while Nasdaq 100 futures dipped 0.4%. Gains were kept in check after China’s National People’s Congress approved a national security bill for Hong Kong. The bill will bypass Hong Kong’s legislature, raising concerns over the longevity of Hong Kong’s “one party, two systems” principle, which allows additional freedoms mainland China does not have. The market moves Thursday promised to add to sharp rallies in the major stock indexes so far this week. The S&P 500, Nasdaq Composite and Dow are up 2.7%, 0.9% and 4.4% since the start of the holiday-shortened week. The Dow is on track for its best week since the week ended April 8. Traders say this week’s rally is in large part thanks to optimism about the reopening of the U.S. economy. “The greatest stimulus for the economy is a safe reopening,” wrote Gregory Faranello, head of U.S. rates trading at AmeriVet Securities. “In the end, reopening in and of itself will gradually show improvement although the true demand side still remains unclear.” The Labor Department said Thursday another 2.1 million Americans filed for unemployment benefits last week. That’s more than a Dow Jones estimate of 2.05 million. To be sure, the number of continuing claims fell by nearly 4 million. “This is likely due to businesses beginning the reopening process,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “Both initial claims and importantly continuing claims will be most relevant to analyze after most things have already reopened.” Stocks in Asia Pacific were mixed on Thursday as mounting U.S.-China tensions weighed on investor sentiment. Japanese stocks led gains among the major regional markets, with the Nikkei 225 rising 2.32% to close at 21,916.3. The Topix index also advanced 1.8% to finish its trading day at 1,577.34. Hong Kong’s Hang Seng index slipped 1.11%, as of its final hour of trading. Mainland Chinese stocks were mixed on the day, with the Shanghai composite up 0.33% to about 2,846.22 while the Shenzhen component slipped 0.273% to around 10,653.49. Meanwhile, South Korea’s Kospi dipped 0.13% to end its trading day at 2,028.54. Oil prices slid for a second consecutive session on Thursday as U.S. industry data showed a steep and surprising build-up in crude stockpiles, dampening hopes of a smooth demand recovery as the world begins to ease its way out of coronavirus lockdowns. The decline extended losses from Wednesday on uncertainty about Russia’s commitment to deep oil production cuts in the lead-up to a June 9 meeting of the Organization of the Petroleum Exporting Countries and its allies, dubbed OPEC+. West Texas Intermediate crude futures were down 22 cents, or 0.7%, at $34.61 per barrel, after slipping as much as 5% to a low of $31.14 earlier in the session. Brent crude futures dropped 0.4%, or 13 cents, to $34.61 per barrel. Gold rebounded on Thursday as deteriorating U.S.-China relations over Beijing’s move to impose a national-security law in Hong Kong fanned concerns over quick economic recovery and drove investors towards the safe-haven metal. Spot gold was up 0.8% at $1,722.70 per ounce, recovering from a two-week low of $1,693.22 touched in the previous session. U.S. gold futures rose 0.8% to $1,739.70.