Friday September 18th

18-09-2020

U.S. stock futures are mixed after Dow snaps a 4-day winning streak

U.S. stock index futures were little changed as Wall Street tried to recover from another sharp sell-off in major technology names. Futures on the Dow Jones Industrial Average traded just 28 points lower, or 0.1%. S&P 500 futures were up slightly and Nasdaq 100 futures traded higher by 0.5%. Shares of Facebook rose more than 1% in the premarket. Amazon, Apple, Netflix and Alphabet were all higher as well. Oracle, meanwhile, fell more than 1% after the U.S. government said it will block all TikTok and WeChat downloads in the country on Sunday. This comes as Oracle tries to finalize a partnership deal with TikTok-parent ByteDance. During Thursday's regular trading session, the S&P 500 declined 0.8% for its biggest drop in a week. The Dow dipped 130 points, snapping a four-day winning streak. The tech-heavy Nasdaq Composite fell 1.3% and briefly dipped back into correction territory, down 10% from its record high. "Tech inflicted a lot of the damage as that group extends the sell-off that commenced back on Sept.3," Vital Knowledge founder Adam Crisafulli said in a note on Thursday. "The summer excess is still being wrung out of tech and the process has a bit more to run." Some of the biggest technology stocks have suffered double-digit losses so far this month as investors rotated out of high-flying market leaders. Amazon, Microsoft, Facebook and Apple have all lost at least 10% this month. Investors also remained on edge about the outlook on further coronavirus stimulus as well as the timing of a viable vaccine. Republicans and Democrats are still struggling to agree on how much aid to continue to provide in a follow-up bill to the previous $2 trillion package. President Donald Trump said Wednesday he liked "the larger numbers," urging GOP lawmakers to go for a bigger coronavirus stimulus, but his comments left Republicans skeptical. Meanwhile, the path to a Covid-19 vaccine, which is critical to the economic recovery, still seems unclear. Health officials said vaccinations would be in limited quantities this year and not widely distributed for six to nine months. "A safe and transparent vaccination process is critical to encouraging widespread inoculations once effective vaccines are identified and tested." Mark Haefele, UBS Global Wealth Management's chief investment officer, said in a note. "In our central scenario, we expect widespread vaccine availability by 2Q21." On Thursday, the Federal Reserve, which just began a second round of Wall Street stress tests, said it's weighing whether to continue capping U.S. banks' dividend payments and share buybacks. Asian shares were slightly higher Friday despite some investor attention shifting again to the uncertainties in global economies amid the coronavirus pandemic, as reflected in the overnight fall on Wall Street. Japan’s benchmark Nikkei 225 was little changed but inched up less than 0.1% in morning trading. South Korea’s Kospi added 0.2%. Hong Kong’s Hang Seng rose 0.3%, while the Shanghai Composite edged up 0.5%. Oil futures pulled back Friday, but remained on track for big weekly gains after jumping in the previous session as Saudi Arabia’s energy minister took a stern tone on compliance with OPEC+ production curbs and dared speculators to short crude. West Texas Intermediate crude for October delivery fell 48 cents, or 1.2%, to $40.49 a barrel on the New York Mercantile Exchange, while November Brent crude, the global benchmark, was off 47 cents, or 1.1% at $42.83 a barrel on ICE Futures Europe. Gold futures edged up Friday morning and looked likely to post a weekly gain but the metal has thus far failed to score a big boost from Federal Reserve policy that signals a lower-for-longer path for interest rates for the next three to four years. “Bullion is waiting for new market drivers, as investors seem to have fully priced in the current scenario and the hyper-expansive monetary policies of central banks,” wrote Carlo Alberto De Casa, chief analyst at ActivTrades in a research note on Friday. December gold was gaining $7.40, or 0.4%, to trade at $1,957.40 an ounce, following a 1.1% slide on Thursday.