Tuesday November 17th

17-11-2020

Stock futures slip a day after the Dow and S&P 500 close at records

U.S. stock index futures declined on Tuesday morning after the Dow-Jones and the S&P 500 closed at record levels. Dow futures fell 168 points, or 0.5%. The move implied an opening loss of about 160 points. S&P 500 futures slid 0.4%. Nasdaq 100 futures were higher by 0.3%. Shares of pharmacy owner CVS Health and Dow member Walgreens Boots Alliance dropped in premarket trading after Amazon launched a pharmacy business, which allows free delivery of medications for Prime members. Walgreens shares dropped 10% and CVS lost 6%. Amazon shares popped 2.6% in premarket trading. Tesla shares jumped more than 13% in premarket trading after S&P Dow Jones Indices said the electric car maker would join the S&P 500 index, effective Dec. 21. It was a long anticipated move for the surging stock. Before Monday, the shares had already more than quadrupled this year. Home Depot fell after its earnings report Monday morning even after saying sales surged 24% last quarter. Walmart shares gained 2% in premarket trading after earnings topped expectations on soaring e-commerce sales. On Monday, the Dow and S&P 500 posted all-time closing highs. The Dow also notched an intraday record. Those gains came after Moderna released trial data showing its coronavirus vaccine was more than 94% effective, further raising expectations of a sharp economic recovery. That marked the second positive announcement related to a coronavirus vaccine in a week. Pfizer and BioNTech said Nov. 9 that their Covid-19 vaccine candidate was more than 90% effective among participants in a late-stage trial. Value stocks led the advance on Monday, building on their strong gains from last week. The iShares Russell 1000 Value ETF (IWD) jumped 1.9%, while its growth counterpart closed higher by just 0.5%. “Value and smaller companies typically have more leverage to economic recoveries so a vaccine that would remove the weight of COVID-19 off the economy is a distinct positive,” wrote Bill Stone, chief investment officer at Stone Investment Partners. “Time will tell if this reversal in trends proves durable or starts “makin’ the tears rain down like a monsoon” for value proponents like the many recent false starts.” The recent outperformance in value stocks comes even as the number of coronavirus cases continues to increase, dampening the country’s near-term economic outlook. More than 1 million cases were confirmed in less than a week in the U.S., bring the country’s total to more than 11 million, according to data from Johns Hopkins University. Data from The Covid Tracking Project also showed U.S. coronavirus-related hospitalizations have risen to nearly 70,000. “The near-term COVID backdrop remains bleak with exploding cases, rising hospitalizations, and additional mitigation measures,” wrote Adam Crisafulli, founder of Vital Knowledge. “But the broader tape is willing to overlook all this for the time being.” Asia-Pacific shares were mixed by the close on Tuesday even as vaccine hopes once again lifted Wall Street to record highs. Airline stocks in the region got a boost. In Japan, the Nikkei 225 rose 0.42% to close at 26,014.62, after touching a 52-week high on Monday. The Topix edged up 0.16% to 1,734.66. Mainland Chinese stocks were subdued. The Shanghai composite edged down 0.21% to close at 3,339.90, while the Shenzhen component declined 0.85% to 13,732.52. Hong Kong’s Hang Seng index was above the flatline in the afternoon. South Korea’s Kospi edged down 0.15% to 2,539.15. Over in Singapore, the Straits Times index jumped nearly 1% in the afternoon. Oil prices edged higher on Tuesday on expectations OPEC and its allies will extend oil production cuts for at least three months, while sentiment was bolstered by news of another promising coronavirus vaccine. Brent crude futures for January rose 26 cents, or 0.6%, to $44.08 a barrel by 0535 GMT and U.S. West Texas Intermediate crude for December added 18 cents, or 0.4%, to $41.52 a barrel. Gold inched lower on Tuesday as optimism over an effective COVID-19 vaccine offset concerns facing its eventual rollout, a subdued dollar and bets for further monetary support as infections surged in Europe and the United States. Spot gold fell 0.1% to $1,887.40 per ounce, but held in a tight $9 range. U.S. gold futures eased 0.1% to $1,886.20.