Wednesday September 30th


Futures fall slightly after debate as stocks head for first down month since March, Disney declines

U.S. stock index futures declined early Wednesday as a contentious U.S. presidential debate raised more uncertainty around the election. The market headed for its first negative month since March. Disney added to the negative sentiment after saying it would lay off 28,000 people in its theme parks division. The shares lost more than 2% in premarket trading. Dow Jones Industrial Average futures dipped 50 points, or 0.1%. The move indicated a slight gain of about 30 points at the open. S&P 500 futures fell 0.1%. Nasdaq 100 futures lost about 0.2%. Futures cut their losses after better-than-expected jobs data. ADP’s monthly private-sector jobs count showed growth of 749,000 in September, ahead of the 600,000 expected from a Dow Jones economist survey. The S&P 500 is down 4.7% in September, on pace for its first monthly losses since March. The Nasdaq Composite is down 5.9% in September, while the Dow is off by 3.4%. Traders were hoping that the start of the debate process will lead to a clear winner on Election Day and not a drawn-out electoral process that could hit the market. The vicious first debate did little to ease those concerns. “It was a long night and there’s a lot that needs to be sorted out,” said Daniel Deming, managing director at KKM Financial. “It became pretty apparent that this thing is not going to be over on Nov. 3 and I think the market is probably not too crazy about that.” “The short-term volatility pressures probably won’t abate anytime soon after this debate. In a sense, it’s creating even more uncertainty,” Deming said. Many market strategists have cited uncertainty around the election as a key headwind for the market before year-end with each outcome bringing its own risks and benefits. Some investors have raised concerns about a potential Biden win as they fear it could lead to higher corporate taxes and tighter regulations. But at the same time, it could ease concerns about the trade war and lack of stimulus to bolster the economy in the wake of the coronavirus. Investors are also worried about the potential the Nov. 3 result is too close to call and neither candidate concedes. That uncertainty could particularly weigh on the market. Still, positive data regarding a potential coronavirus treatment from Regeneron Pharmaceuticals kept some of the market’s losses in check. Regeneron shares rose 4% in early trading. The major averages snapped a three-day winning streak on Tuesday, with the Dow falling more than 100 points, or 0.5%. Those losses came amid concerns over a virus resurgence. New York City Mayor Bill De Blasio said the city’s daily positive rate of coronavirus tests is back above 3% for the first time in months. “Coronavirus infection rates are rising in Europe and the United States as children return to school,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, wrote in a note. “We expect the United States to continue its modest pace of economic improvement, though virus growth and a softer labor market are threats.” Asia-Pacific markets were mixed on Wednesday as investors reacted to the release of China’s manufacturing activity data for September. Mainland Chinese markets were mixed on the day, with the Shanghai composite down 0.2% to about 3,218.05 while the Shenzhen component was fractionally higher at around 12,907.45. Japan markets were lower, with the Nikkei 225 shedding 1.5% to close at 23,185.12 while the Topix index declined 1.97% to finish its trading day at 1,625.49. Hong Kong’s Hang Seng index rose 0.79% to close at 23,459.05. Markets in South Korea were closed Wednesday for a holiday. Oil prices extended losses on Wednesday on worries that rising coronavirus cases heading into the northern winter would lead to further restrictions on activity and curb demand for fuel. Brent crude dropped 48 cents, or 1.2%, to $40.55 per barrel by 0356 GMT. West Texas Intermediate fell 33 cents, or 0.8%, to $38.96. The benchmarks fell more than 3% on Tuesday as global Covid-19 cases passed 1 million, having doubled in three months. Gold fell on Wednesday and was on track for its biggest monthly decline in nearly four years, as the dollar benefited from caution that crept into financial markets after the first U.S. presidential debate. Spot gold fell 0.7% to $1,883.62 per ounce by 0944 GMT, declining 4.3% so far in September, setting it up for its worst monthly performance since November 2016. U.S. gold futures were down 0.8% at $1,888.10 per ounce.