Tuesday September 22nd

22-09-2020

Dow futures fall 100 points amid renewed coronavirus concerns

U.S. stock index futures slipped on Tuesday as traders weighed concerns of a potential new wave of coronavirus cases along with gains in big tech stocks. Dow Jones Industrial Average futures were down 100 points, or 0.4%. S&P 500 futures dipped 0.2% and Nasdaq 100 futures climbed 0.2%. U.K. Prime Minister Boris Johnson announced further restrictions to curb the spread of the virus, noting the country was at a “perilous turning point.” He ordered bars and restaurants to close between 10 p.m. and 5 a.m. The restrictions also expand on the list of places requiring people wear a mask. Amazon shares rose 1.7% in the premarket after a Bernstein analyst upgraded the e-commerce giant to buy from hold, noting the recent pullback offers an attractive “entry point” for investors. Facebook, Apple and Microsoft were also higher. Traders also digested remarks by Federal Reserve Chairman Jerome Powell, who reiterated the central bank will support the economy “for as long as ti takes.” The market’s September sell-off intensified on Monday with the Dow Jones Industrial Average dropping 500 points, suffering its worst day since Sept. 8. The S&P 500 lost 1.2%, posting its first four-day losing streak since February. The Nasdaq Composite dipped just 0.1% after a late-day comeback rally. Shares of Tesla dropped nearly 6% in overnight trading after CEO Elon Musk said in a tweet that the electric carmaker’s “Battery Day” event would not reach “serious high-volume production” until 2022, which disappointed investors and analysts. Investors grew more anxious about the pandemic as the U.K. is reportedly considering another national lockdown as daily new infections rise. Meanwhile, prospects of further U.S. coronavirus fiscal stimulus became bleaker as lawmakers brace for a Supreme Court confirmation fight as President Donald Trump rushes to nominate a successor to Justice Ruth Bader Ginsburg, who died on Friday. “Coronavirus concerns have resurfaced, worrying investors that a reversal in reopening progress could be near,” Lindsey Bell, chief investment strategist for Ally Invest, said in a note. “More and more uncertainty is arising as we get closer to the election but no closer to Congressional fiscal relief. But we’re still optimistic this dip will be bought sooner rather than later.” The major averages are on pace for steep losses for September, a typically weak month for stocks. All three major averages had just suffered three straight weeks of losses. The Dow and the S&P 500 have fallen 4.5% and 6.3% this month, respectively, while the Nasdaq has dropped 8.4% as investors dumped high-flying tech giants. “Market volatility is returning after months of steady advances in risk assets, and we see elevated volatility ahead of the November U.S. election,” Jean Boivin, head of BlackRock Investment Institute, said in a note. “In addition, negotiations of a new U.S. fiscal package are dragging on, the pandemic is still spreading in many countries, and U.S. China tensions are running high.” On Tuesday, investors will monitor a hearing with U.S. Treasury Secretary Steven Mnuchin and Federal Reserve chair Jerome Powell in front of the House Financial Services Committee about pandemic responses. On the earnings front, Nike will report its fiscal first-quarter results after the bell on Tuesday. Airline stocks in Asia-Pacific tumbled on Tuesday as coronavirus fears returned, with major stock markets also seeing declines. In Hong Kong, shares of China Eastern Airlines dropped 4.8% while China Southern Airlines fell 5.27%. Cathay Pacific also slipped 2.11%. Over in South Korea, Korean Air Lines was down 2.39%. Australia’s Qantas Airways declined 1.82%. Singapore Airlines shares in Singapore also shed 1.75%, as of around 4:27 p.m. HK/SIN. South Korea’s Kospi led losses among the region’s major markets as it declined 2.38% to close at 2,332.59. The Hang Seng index in Hong Kong slipped 0.98% to finish its trading day at 23,716.85 . Mainland Chinese stocks also saw losses on the day, with the Shanghai composite down 1.29% to about 3,274.30 while the Shenzhen component was 0.959% lower at around 13,023.43. Markets in Japan were closed on Tuesday for a holiday. Oil rose in early trade on Tuesday, paring sharp overnight losses, as the latest tropical storm in the Gulf of Mexico lost strength, but worries about fuel demand persisted with flare-ups around the globe in coronavirus cases. Brent crude futures rose 40 cents, or 0.97%, to $41.84 a barrel. U.S. West Texas Intermediate crude futures for October, due to expire on Tuesday, rose 29 cents, or 0.74%, to $39.60 a barrel. The more active November contract rose 13 cents, or 0.3%, to $39.67. Gold fell on Tuesday as the dollar climbed to its highest in over a month, while investors remained doubtful over additional stimulus measures to aid the coronavirus-hit economy ahead of speeches from Federal Reserve officials this week. Spot gold had fallen 0.45% to $1,904.00 per ounce, after dipping to $1,882.70 on Monday, its lowest level since Aug. 12. U.S. gold futures fell 0.1% to $1,909.10 per ounce.