Friday October 16th

16-10-2020

Dow futures up 100 points after big beat on September retail sales

U.S. stock index futures rose on Friday, boosted by strong U.S. retail sales data as Wall Street tried to snap a three-day losing streak. Dow Jones Industrial Average futures traded 126 points higher, or 0.4%. S&P 500 futures gained 0.4% and Nasdaq 100 futures advanced 0.7%. Retail sales jumped 1.9% in September, easily topping a Dow Jones estimate of 0.7%. Futures also gained after Pfizer said it would apply for emergency use of its coronavirus vaccine as soon as it reaches certain safety milestones that it expects to have in late November. Meanwhile, Europe’s aviation regulator said Boeing’s 737 Max jet is safe to fly again. Boeing shares rose 3.8% in the premarket. The major averages suffered their third straight day of losses on Thursday, their longest losing streak in nearly a month. The Dow and the S&P 500 closed well off their lows Thursday, however, helped by strength in cyclical stocks including financials and real estate names. “Value/cyclical stocks recouped some of their recent underperformance with strength in energy, autos, transports, non-essential retail, and financials.” Adam Crisafulli, founder of Vital Knowledge, said in a note on Thursday. Stocks’ weakness this week came amid the uncertainties around further coronavirus stimulus as well as fears of a worsening pandemic around the world. Lawmakers in Washington continued to send mix signals about progress toward a stimulus deal. Treasury Secretary Steven Mnuchin said Thursday that the White House won’t let differences over funding targets for Covid-19 testing derail stimulus talks with top Democrats. Later, President Donald Trump said that he would raise his offer for a stimulus package above his current level of $1.8 trillion. House Democrats have passed a $2.2 trillion bill. Meanwhile, the spike in new coronavirus cases in Europe also kept investors on edge. The U.K. government announced plans to impose tougher coronavirus restrictions on London, while the French government declared a public health state of emergency earlier this week amid a surge in cases. Germany has also announced new rules to curb the spread of the virus. Stocks across Asia-Pacific were mostly down by the close on Friday, amid dampened sentiment on the coronavirus front. Meanwhile, the U.S. dollar strengthened as uncertainty rose with investors flocking to the haven currency. Mainland Chinese stocks were mixed by the close, with the Shanghai composite up 0.13% to 3,336.36, while the Shenzhen component declined 0.68% to 13,532.73. Over in Hong Kong, the Hang Seng index jumped 1.04% by the afternoon. But markets were mostly down in other regional markets. Japan’s Nikkei 225 declined by 0.41% to close at 23,410.63, while the Topix was down 0.86% to 1,617.69. In South Korea, the Kospi traded lower by 0.83% to 2,341.53. Oil prices slid on Friday dragged down by concerns that a spike in Covid-19 cases in Europe and the United States is curtailing demand in two of the world’s biggest fuel consuming regions, while a stronger U.S. dollar also added to pressure. Brent crude futures for December dropped 46 cents, or 1.07%, to $42.70 a barrel, while U.S. West Texas Intermediate (WTI) crude futures for November delivery slid 43 cents, or 1.05%, to $40.53 a barrel. Gold steadied on Friday as the dollar eased but was still set for its first weekly loss in three as doubts over a U.S. stimulus agreement before next month’s presidential election dented demand for the metal as an inflation hedge. Spot gold was up 0.1% at $1,909.53 per ounce but down more than 1% so far this week. U.S. gold futures edged 0.1% lower to $1,907.50.