Tuesday June 22nd


Stock futures are flat after Monday’s comeback rally

U.S. stock index futures were little changed on Tuesday after the Dow Jones Industrial Average on Monday posted its best day since March. Dow Jones Industrial Average futures dipped 10 points. S&P 500 futures were flat. Nasdaq-100 were 0.1% lower. Bitcoin broke below $30,000 on Tuesday to trade at its lowest level in more than five months as losses accelerated with intensified crackdown efforts by China. Alphabet shares traded slightly lower in premarket trading after the European Commission opened a probe into Google’s advertising unit. On Monday, the blue-chip Dow gained 580 points for its best day since March 5 as shares tied to the economic recovery snapped back from last week’s sell-off induced by the Federal Reserve’s updated projections on inflation and interest rate hikes. “Stocks staged a strong rebound on Monday, although all the S&P did was recoup its decline from Friday,” said Vital Knowledge’s Adam Crisafulli. “Cyclical stocks may have rebounded on Monday, but they are still in a downtrend and investors should use rallies to book profits.” After Monday’s comeback, the S&P 500 is back within striking distance of a record, trading just 0.8% below its all-time high. Fed Chairman Jerome Powell will testify before the House of Representatives Tuesday on the central bank’s response to the pandemic. His remarks, which were released ahead of the hearing Monday evening, are likely to support the notion that the Fed is ready to soon start discussing removing some of its unprecedented stimulus measures enacted during the pandemic. “Since we last met, the economy has shown sustained improvement,” Powell will say Tuesday, according to the Fed release. “Widespread vaccinations have joined unprecedented monetary and fiscal policy actions in providing strong support to the recovery. Indicators of economic activity and employment have continued to strengthen, and real GDP this year appears to be on track to post its fastest rate of increase in decades.” “Inflation has increased notably in recent months,” Powell will say. But the Fed chief will note that most of those are a temporary effect and that inflation should settle back to 2% over the long term. Powell’s testimony begins at 2 p.m. ET. Shares in Asia-Pacific largely rose on Tuesday, with shares in Japan leading gains among the region’s major markets. In Japan, the Nikkei 225 jumped 3.12% to close at 28,884.13, largely recovering from a more than 3% tumble on Monday. The Topix index gained 3.16% to 1,959.53. Mainland Chinese stocks edged higher on the day as the Shanghai composite gained 0.8% to 3,557.41 while the Shenzhen component rose 0.376% to 14,696.29. Hong Kong’s Hang Seng index lagged the broader region’s gains, slipping about 0.3% as of its final hour of trading. South Korea’s Kospi advanced 0.71% to close at 3,263.88. Crude dropped on Tuesday as investors cashed in on a recent rally, but market sentiment remained solid on hopes for a quick recovery in oil demand in the U.S. and European markets and fading expectations for an early return of Iranian crude. Brent crude futures for August eased 43 cents, or 0.6%, to $74.47 a barrel, while U.S. West Texas Intermediate (WTI) crude for July was at $73.15 a barrel, down 51 cents, or 0.7%. Brent gained 1.9% and WTI jumped 2.8% on Monday. Gold prices edged higher on Tuesday, as a pullback in the dollar lifted demand for the safe-haven metal, ahead of U.S. Federal Reserve Chairman Jerome Powell’s testimony to Congress later in the day. Spot gold was up 0.1% at $1,784.83 per ounce, as of 0054 GMT. U.S. gold futures gained 0.1% at $1,783.90 per ounce.