Wednesday November 18th

18-11-2020

Dow futures rise 120 points as stocks look set to resume gains following a pause in the rally

U.S. stock index futures bounced on Wednesday a day after a pause in the market’s rally to records. Dow Jones Industrial average futures rose 120 points, or 0.4%. The move indicated an opening gain of about 125 points. Futures for the S&P 500 added 0.2%. Nasdaq 100 futures were 0.1% higher. Pfizer released the final data on its vaccine candidate with BioNTech and it was even better than the initial data. The companies said the vaccine was 95% effective in preventing Covid-19 and fended off severe infection in the trial. Dow-member Boeing jumped 5% in premarket trading as the Federal Aviation Administration lifted its ban on its 737 Max after a 20-month grounding following two deadly crashes. Target shares rose 2% after the retailer’s third quarter earnings topped estimates because of booming digital sales. On Tuesday, the Dow Jones Industrial Average fell more than 167 points, dragged down by Walgreens, Home Depot and Walmart. The S&P 500 lost 0.5%. Tuesday’s session was the first time in three days the Dow and S&P 500 fell, following their record closes on Monday. The Nasdaq Composite was the relative outperformer, dipping just 0.2%. Tesla shares popped more than 8% after S&P Dow Jones Indices said that the electric vehicle company will join the S&P 500. Small-caps continued to outperform on Tuesday with the Russell 2000 gaining 0.37% to close at another record. Stocks are having a strong month on the back of positive news from two U.S. drugmakers about successful Covid-19 vaccines. The Dow is up more than 12% and the S&P 500 is up more than 10% in November. The Nasdaq Composite is up more than 9%, lagging as investors ditch technology shares of cyclical plays. “For the most part, the economy has been recovering faster than many expected, as consumer spending has held up quite well throughout the crisis,” Charlie Ripley, senior investment strategist for Allianz Investment Management, said in a note. “Much of this can be seen through consumer spending habits, where the pandemic has caused consumers to shift spending away from service-oriented products and into to more goods-related products.” “While this has been beneficial to the economy overall, it has created a bifurcated recovery, as some sectors of the economy continue to be extremely depressed,” he added. Equities are rising amid a backdrop of worsening Covid-19 infections in the U.S. The U.S. seven-day average of daily new Covid-19 infections surpassed 150,000 for the first time on Monday, according to a CNBC analysis of Johns Hopkins data. Retail sales came in lower-than-expected for October as millions of Americans lost their unemployment benefits amid the surge in cases. Lowe’s shares dropped 6% after the home improvement retailer reported third-quarter earnings and a profit outlook slightly short of estimates. A slew of other retailers report quarterly earnings on Wednesday, with chipmaker Nvidia, Copa Holdings and L Brands set to release earnings following Wednesday’s session. Asia-Pacific markets were mixed by the close on Wednesday. Investors remained cautious despite vaccine hopes, as coronavirus cases continued to surge. China’s Shanghai composite edged up 0.22% to close at 3,347.30, while the Shenzhen component fell 0.54% to 13,658.20. Hong Kong’s Hang Seng index traded 0.25% higher in the afternoon. In Japan, the Nikkei 225 fell 1.10% to close at 25,728.14, while the Topix dropped 0.81% to 1,720.65. In South Korea, the Kospi edged up 0.26% to close at 2,545.64. Oil prices firmed on Wednesday as hopes that producer group OPEC and its allies will delay a planned increase in oil output to offset a bigger than expected build in U.S. crude inventories. Brent crude futures rose 81 cents, or 1.87%, to $44.57 per barrel, while U.S. West Texas Intermediate crude gained 75 cents, or 1.8%, to trade at $42.19 per barrel. Gold prices edged lower on Wednesday due to optimism over a potential Covid-19 vaccine, but concerns over the economic impact from the resurgence of coronavirus cases in the United States limited their decline. Spot gold fell 0.1% to $1,877.39 per ounce by 0344 GMT, while U.S. gold futures were down 0.5% at $1,875.30.