Stock futures lower despite fall in U.S. jobless claims


U.S. stock-index futures fell early Thursday, while investors sift through economic data including the weekly jobless benefit claims report, after the stock market posted one of its best daily gains in weeks on Wednesday.

How are equity indexes performing?

Futures for the Dow Jones Industrial Average
YM00,
-0.05%

YMU20,
-0.05%

were off 22 points, or 0.1%, at 29,069; those for the S&P 500 index
ES00,
-0.50%

ESU20,
-0.50%

were off 16.20 points at 3,563, a decline of 0.5%; Nasdaq-100 futures
NQ00,
-1.34%

NQU20,
-1.34%

were down 140.50 points, or 1.1%, at 12,271.

On Wednesday, Dow
DJIA,
+1.58%

surged 454.84 points, or 1.6%, ending at 29,100.50, or 1.5% away from its Feb. 12 closing high of 29,551.42. The S&P 500 index
SPX,
+1.53%

climbed 54.19 points, or 1.5%, to settle at a record 3,580.84, its 22nd record close this year. The Nasdaq Composite Index
COMP,
+0.97%

advanced 116.78 points to close at a record 12,056.44, a gain of 1%, and its 43rd record close of the year.

What’s driving the market?

After a day of records for the S&P 500 and the Nasdaq Composite and the rapid of approach of the Dow to its own record, investors watched U.S. weekly jobless benefits claims data on Thursday morning.

Total new applications for unemployment benefits in the latest weekly period ending in Aug. 30 fell 130,000 to a seasonally adjusted 881,000 or lower than the consensus estimate of 940,000. This comes after the Labor Department said it tweaked its seasonal adjustment method amid the COVID-19 pandemic.

In other data, a revised reading of U.S. second-quarter productivity rose 10.1%, while the trade deficit widened to $63.6 billion.

Read: ADP says private sector added a less-than-expected 428,000 new jobs in August

Investors will also be watching a reading on the purchasing managers index in services from IHS Markit at 9:45 a.m. ET, and a survey by the Institute of Supply Management on activity in the service sector at 10 a.m. ET.

Market participants have been contending with a nearly incessant climb higher, with the focus on remedies for COVID helping to partially buttress the recent run-up. That said, Wednesday’s climb for stocks came even as large-capitalization technology-related stocks staged a pullback that didn’t disrupt the upward momentum of the broader equity market. Tech-related names have led the rebound of the market from coronavirus-lows but some strategists spotted encouraging signs that other areas beyond tech-related names were starting to rise.

“The more broad based this becomes, the more it signals a turning of the tide as far as the economic outlook is concerned, at least among those on Wall Street,” wrote Craig Erlam, senior market analyst at Oanda, in a daily research note.

However, there are concerns that market has climbed too far and too fast and that optimism over a vaccine for coronavirus is misplaced. The Centers for Disease Control and Prevention urged states to speed up approval for vaccine distribution sites by Nov. 1, which is just days before the presidential election.

Meanwhile, doubts about traction for further fiscal stimulus from Washington lawmakers has continued to haunt investors. Investors have been betting on Republicans and Democrats striking a deal later this month to offer additional relief to American consumers and businesses, after talks stalled in August. On Tuesday, House Speaker Nancy Pelosi said Democrats and Republicans still have “serious differences,” following a brief phone call.

Separately, tensions flared up between Beijing and Washington as the Trump administration signaled plans to impose new restrictions on Chinese diplomats in the U.S., citing Beijing’s use of similar measures on American envoys. The Chinese embassy in Washington responded by accusing the U.S. of violating international conventions.

Which stocks are in focus?
  • Michaels Cos. Inc. shares
    MIK,
    -2.34%

    soared 6.7% in premarket trade, after the arts and crafts retailer blew past estimates for the second quarter as stores reopened after being closed during the pandemic.

  • Shares of Sanofi
    SNY,
    +1.06%

    gained 0.4% before the bell after the drugmaker and GlaxoSmithKline
    GSK,
    +2.41%

    said their COVID-19 vaccine candidate has entered a Phase 1/2 clinical trial.

  • Arconic Corp.
    ARNC,
    -0.74%

    said Thursday it restored the salaries and 401K match for all of its U.S. salaried employees, including executives on Sept. 1, after cutting them earlier this year to counter the impact of the coronavirus pandemic.

  • Shares of Designer Brands Inc.
    DBI,
    +6.03%

    plummeted 19% in premarket trading Thursday, after the parent of the DSW Designer Shoe Warehouse retail chain reported a wider-than-expected fiscal second quarter

  • Facebook
    FB,
    +2.39%

    slipped after announcing Thursday it will ban new political ads from running in the week before the Nov. 3 presidential election.

How are other markets trading?

The 10-year Treasury note yield
TMUBMUSD10Y,
0.646%

edged 0.3 basis point higher to 0.653%. Bond prices move inversely to yields.

The ICE U.S. dollar index
DXY,
+0.03%

, which tracks the performance of the greenback against its major rivals, was up 0.2%.

Gold futures
GCZ20,
-0.20%

were down 0.4% to trade at $1,936.80 an ounce, on the New York Mercantile Exchange. U.S. benchmark crude futures
CL.1,
-2.21%

fell 2.2% to a one-month low of $40.61 a barrel.

The Stoxx Europe 600 index
SXXP,
+0.67%

rose 0.4%, while the U.K.’s benchmark FTSE
UKX,
+1.11%

as up 0.5%. In Asia, Hong Kong’s Hang Seng index
HSI,
-0.44%

fell 0.5% and China’s CSI 300
000300,
-0.55%

closed 0.6% lower. The Nikkei
NIK,
+0.93%

rose 0.9%.



Original source link

S&P 500 and Nasdaq open at intraday records though ADP private-sector jobs report disappoints


U.S. equity benchmark indexes were trading at or near record territory early Wednesday, as investors drew hope from progress in the development of tests and vaccines for COVID-19 along with the potential for another fiscal stimulus package in Washington.

Investors were also digesting a private-sector jobs report that came in weaker than expected, well below the nearly 1 million that had been estimated for the month. An account of business conditions in parts of the U.S. from the Federal Reserve is due later in the afternoon.

How are the benchmarks performing?

The Dow Jones Industrial Average
US:DJIA
gain 120 points, or 0.4%, at 28,753, the S&P 500 index
US:SPX
climbed 14 points, or 0.4%, at 3,541, after hitting an intraday record at 3,546,41, while the Nasdaq Composite Index
US:COMP
advanced 81 points to reach 12,000, a gain of 0.6%, following its own intraday all-time high at 12,050.46.

On Tuesday, the Dow rose 215.61 points to end at 28,645.66, or 0.8% higher, the S&P 500 index  added 26.34 points to close at a record 3,526.65, a gain of 0.8%, after setting an intraday record of 3,528.03; while the Nasdaq Composite Index advanced 165.21 points to a record 11,939.67 finish, a rise of 1.1%, after touching a new intraday all-time high of 11,945.72.

What’s driving the market?

Stock markets looked upbeat early Wednesday, with a number of possible catalysts helping the investing mood amid the coronavirus pandemic. Bloomberg reported that U.S. Treasury Secretary Steven Mnuchin has again restarted talks with House Speaker Nancy Pelosi, sparking fresh hope of another fiscal stimulus plan to help out-of-work Americans.

On the health front, the leading health expert Dr. Anthony Fauci said that a COVID-19 pandemic could come sooner than expected if the roster of companies attempting to achieve a cure are able to produce outstanding preliminary results.

Speaking to Kaiser Health News, Fauci said that the board that is overseeing vaccine approvals could decided that “the data is so good right now that you can say it’s safe and effective.”

The global tally for confirmed cases of the coronavirus that causes COVID-19 climbed to 25.8 million on Wednesday, according to data aggregated by Johns Hopkins University, while the death toll rose to 857,552

Early moves in the session come a day after buying in large-capitalization technology stocks and shares tied to pandemic stay-at-home trends led the S&P 500 index to record its 21st record close of 2020 and the Nasdaq Composite its 41st on Tuesday.

Meanwhile, investors assessed a report from Automatic Data Processing Inc
US:ADP
that said 428,000 private-sector jobs were created in August, missing expectations for a gain of 900,000 jobs, according to a consensus of estimates surveyed by Econoday.

ADP did, however, raise last month’s jobs figure to 212,000 for July from a rise of 167,000, which was then below forecast of 1.9 million jobs.

The economy has recouped fewer than half of the 20 million-plus jobs lost in the early stages of the coronavirus pandemic.

In other news, the Centers for Disease Control and Prevention late Tuesday implemented a temporary eviction moratorium through the end of the year, protecting millions of U.S. renters from losing their homes during the COVID-19 pandemic, the Trump administration announced.

Other economic data, will be watched, including the Federal Reserve’s Beige Book, an anecdotal account of business conditions in the central bank’s districts set to be released at 2 p.m. ET, and before that a report on factory orders for July is due.

Which stocks are in focus?
  • Shares of Macy’s Inc.
    US:M
    shot up Wednesday, after the department store chain reported a fiscal second-quarter loss that was much narrower than expected as net sales topped forecasts.

  • Vera Bradley Inc. shares
    US:VRA
    soared Wednesday, after the handbag and accessories retailer posted a surprise profit for the second quarter.

  • Shares of DraftKings
    US:DKNG
    rallied Wednesday after the company added basketball legend Michael Jordan as an adviser to the company.

  • Shares of Peloton Interactive Inc.
    US:PTON
    ran up 7.9% toward record territory Wednesday, extending the 25.9% rally over the past six sessions, after J.P. Morgan analyst Doug Anmuth boosted his price target to the highest among Wall Street analysts, citing optimism ahead of next week’s earnings report.

  • Shares of Jack Daniel’s parent Brown-Forman Corp.
    US:BF
    fell Wednesday, although the alcohol brands company reported fiscal first-quarter results that beat expectations, although gross margin contracted as price/mix decreased.

  • Shares of ServiceMaster Global Holdings Inc.
    US:SERV
    were up Wednesday, after the termite and pest control company said it’s selling its ServiceMaster Brands franchise business for $1.55 billion to Roark Capital.

  • Clothing retailer Guess Inc. shares
    US:GES
    soared Wednesday, after the company blew past estimates for its fiscal second quarter.

How are other assets trading?

The Stoxx Europe 600
XX:SXXP
traded 1.8% higher, while U.K.’s FTSE 100 benchmark
FR:UKX
headed 1.5% higher on Wednesday.

The yield on the 10-year Treasury note
BX:TMUBMUSD10Y
added 0.6 basis point at 0.68%. Bond prices move inversely to yields.

Gold
US:GCZ20
shed $9.40, or 0.5%, at $1,969.90 an ounce, pulling back from its highest settlement in about two weeks on Tuesday. West Texas Intermediate crude for October delivery
US:CL
traded 20 cents higher, or 0.5%, at $42.95 a barrel on the New York Mercantile Exchange.

The ICE U.S. Dollar Index
US:DXY,
which tracks the currency versus a basket of six major rivals, rose 0.3% at 92.637 after trading down earlier in the session.

In Asia, China’s CSI 300
XX:000300
closed less than 0.1% higher and Hong Kong’s Hang Seng
HK:HSI
finished 0.3% lower. Japan’s Nikkei 225
JP:NIK
rose 0.5%, while the South Korea’s Kospi
KR:180721
gained 0.6%.



Original source link

Dow fights for altitude early Tuesday as big tech stocks lead Nasdaq to fresh intraday record


U.S. stock indexes attempted to push higher Tuesday morning, as the buying momentum on Wall Street refused to be deflated, even as investors enter what is expected to be a seasonally challenging month for equities, following the best August returns in more than 30 years.

How are stock benchmarks performing?

The Dow Jones Industrial Average
DJIA,
+0.04%

was up 2 points at 28,433, a less-than 0.1% rise, reversing an opening slide; the S&P 500 index
SPX,
+0.18%

added 7 points to reach 3,507, a rise 0.2%; while the Nasdaq Composite Index
COMP,
+0.77%

advanced 87 points at 11,861, a rise of 0.7%, touching a record intraday high at 11,865.66.

On Monday, the Dow shed 223.82 points, or 0.8%, to end at 28,430.05. The S&P 500
SPX,
+0.18%

fell 7.70 points, or 0.2%, ending at 3,500.31. The Nasdaq rose 79.82 points, 0.7%, to end at a record 11,775.46, its 41st record close of 2020.

The S&P 500 clinched its best August return since 1986 and the Dow its best return for that month since 1984, while the Nasdaq recorded its strongest August since 2000

What’s driving the market?

Buying of large-capitalization growth and technology stocks, a major theme of trading since the coronavirus pandemic took hold in March, appeared set to continue to start trade in September.

Tesla and Apple, underscored that theme early Tuesday, with shares of the electric-vehicle maker and the iPhone creator on pace to extend a rally after splitting their popular shares on Monday.

Still, investors are anxious going into the new month as they wrestle with stock valuations elevated against a backdrop of a Federal Reserve that has implied that it will keep rates ultra-low even if inflation pressures begin to percolate.

Read: The stock market is on a tear, but now comes September, the worst month of the year

“Technology has regained leadership with broad-based movement back to new highs, and Growth dominating, but bifurcation is growing larger,” Mark Newton, technical analyst at Newton Advisors, said.

He cautioned that breadth, or the number of stocks rising versus those declining, is offering a cautious sign. “Breadth has tailed off ‘big-time’ with more than 5 occurrences in the last few weeks of more decliners than advancing issues,” he said.

Read:Here’s what could trigger more stock market pullbacks this year, says Schwab trading expert

The Fed’s new stance on inflation targeting is still being digested on Wall Street and has so far resulted in more pressure on the U.S. dollar, a factor that may also support further buying in stocks that boast large overseas businesses.

In U.S. economic news, the seasonally adjusted IHS Markit final manufacturing sector purchasing managers’ index rose to 53.1 in August, down slightly from the previously released ‘flash’ estimate of 53.6, but up from 50.9 at the start of the third quarter to post the fastest expansion since January 2019.

A closely watched PMI report on manufacturing activity from the Institute for Supply Management for August is due at 10 a.m., with a consensus forecast for 54.7.

Overnight the eurozone IHS manufacturing purchasing managers index pointed to improving conditions in August, as the region’s recovery from the coronavirus pandemic continued, while in China the Caixin purchasing managers index, which is weighted toward small, private manufacturers, rose to 53.1 in August from 52.8 in July.

A report on U.S. construction spending for July also is due at 10 a.m., with report on motor vehicle sales coming throughout the day.

Among Fed speakers, Fed Gov. Lael Brainard is slated to speak at 1 p.m.

Which stocks are in focus?
  • Shares of Tesla Inc.
    TSLA,
    -4.08%

    were down 2.5% on Tuesday after it announced a $5 billion offering, which deflated its momentum after its stock split on Monday.

  • Zoom Video Communications Inc.
    ZM,
    +42.52%

    shares soared 28% early Monday after the company made as much money in May, June and July as it did in all of 2019, beating even the outsize expectations of Wall Street and sending its stock, its recent quarterly results out on Monday revealed.

  • Shares of Eastman Kodak Co.
    KODK,
    +25.20%

    were up more than 36% Tuesday after the company disclosed that D.E. Shaw & Co. has taken a 5.2% stake in the company.

How are other assets trading?

In Asia, China’s CSI 300
000300,
+0.53%

rose 0.5% and Hong Kong’s Hang Seng
HSI,
+0.03%

finished virtually unchanged but in positive territory on the session.

The Stoxx Europe 600
SXXP,
-0.84%

traded 0.1% lower, while U.K.’s FTSE 100 benchmark
UKX,
-1.36%

tumbled 1.5% so far on Tuesday.

The yield on the 10-year Treasury note
TMUBMUSD10Y,
0.716%

added 1.4 basis points to 0.72%, after adding 15.9 basis points during August. Bond prices move inversely to yields.

Gold
GCZ20,
-0.01%

jumped $19.90, or 1%, to $1,998.50 an ounce, trading around its highest level in about two weeks. West Texas Intermediate crude for October delivery
CL.1,
+1.61%

traded 40 cents, or 0.9%, at $43.02 a barrel on the New York Mercantile Exchange.

The ICE U.S. Dollar Index
DXY,
+0.02%
,
which tracks the currency versus a basket of six major rivals, fell 0.3% to extend its decline this year and trade around its lowest level since 2018.



Original source link

Here’s what could trigger more stock market pullbacks this year, says Schwab trading pro


A record-setting August for stocks has set the bar high, and September looks off to a promising start, at least for technology stocks, with electric-car maker Tesla
TSLA,
+12.56%

poised for more big gains.

That brings us to our call of the day from Schwab Center for Financial Research’s vice president of trading and derivatives, Randy Frederick, who thinks the stock market may finally deliver on some much-needed corrections.

“Obviously these things are difficult to pinpoint, but a 2%-3% decline sometime in the next couple of weeks wouldn’t be at all surprising to me. I continue to believe that the SPX
SPX,
-0.21%

[S&P 500] can reach 3,700 (+14.5%) by year-end, but probably not without three or four small pullbacks along the way,” he told MarketWatch in an interview and follow-up email.

“We haven’t had anything of that nature at all since going all the way back to early June, when we had that big drop-off. We’re clearly way overdue on that,” Frederick said. And while 3,700 sounds “pretty remarkable from a bottom-of-the-virus return,” on a year-to-date basis that 14% gain for the S&P 500 is fairly average, he noted.

When those smallish pullbacks come along, though, he advises against panic (he urged no panic in early March too), saying “they will be and should be used as buying opportunities.” That is because there is nowhere else for investors to put their money as any Federal Reserve interest rate increase is years out, said Frederick. And investors should learn from those who panicked out of the market in 2008 and missed out on an 11-year bull market, he added.

One potential correction trigger is technical, as he says 2020 has been closely tracking the action in 2009. That year saw three pullbacks — 3.5%, 4.3% and 5.6% in the last few months of 2009 — as his chart shows:

A “substantial pullback in earnings could also trigger a pullback,” he said, noting that second-quarter S&P 500 earnings per share came in far better than expected.

Frederick is watching the coronavirus pandemic as a potential trigger, with schools opening across the country and the potential for a dramatic uptick in the case count spooking markets, while trade issues with China shouldn’t be dismissed, as they also have the power to unhinge markets.

Another stick of dynamite for stocks is continued wrangling over enhanced unemployment benefits in the U.S. “That’s a big issue that needs to be resolved on what they should do to support workers and small business going forward,” said Frederick.

Read: Investors may be betting the wrong way on the U.S. election, says JP Morgan

The market

Nasdaq-100
NQ00,
+0.81%

futures are tearing higher, with Dow
YM00,
-0.10%
,
S&P
ES00,
+0.18%

futures up modestly. European stocks
SXXP,
+0.12%

are mixed, with the euro
EURUSD,
+0.42%

at a two-year dollar high. Gold
GC00,
+0.93%

and oil
CL.1,
+1.17%

are up, and Asian stocks were mixed.

The buzz

Tesla’s premarket climb has been slowed by news it will sell up to $5 billion worth of its stock. Also, an analyst said the electric-car maker is “fundamentally overvalued.”

Shares of Zoom
ZM,
+8.63%

are surging, after the videoconferencing group soundly beat forecasts. Companies paid up for the service.

Apple
AAPL,
+3.39%

reportedly ordered 75 million 5G iPhones, and shares are up.

Retailer Walmart
WMT,
-1.03%

is launching a $98 a year membership program offering fuel discounts and free shipping, to perhaps rival Amazon Prime
AMZN,
+1.44%
.

An update on manufacturing from U.S. purchasing managers, construction spending and automobile sales are ahead. China delivered stronger-than-expected manufacturing numbers.

President Donald Trump has defended his decision to visit Kenosha, Wis., on Tuesday, and offered up a defense of the teenager who shot two protesters. Democratic rival Joe Biden accused him of making things worse. A shooting in Los Angeles late on Monday has also drawn protesters.

Random reads

“I wish we had more time” — actor Michael B. Jordan’s moving tribute to late co-star Chadwick Boseman.

Belarusian opposition leader says protesters are vanishing.

Don’t miss the Corn Moon.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.

Follow MarketWatch on Twitter, Instagram, Facebook.





Original source link

An ‘extreme’ August on the stock market might be telling us something about the November election


August marked the best month for the S&P 500
SPX,
-0.21%

since 1986 and for the Nasdaq Composite
COMP,
+0.68%

since 2000.

But it’s a new month and autumn and winter are coming, with a U.S. election race starting to heat up and the COVID-19 battle and all that comes with it. That brings us to our call of the day, from BTIG’s chief equity and derivatives strategist Julian Emanuel, who says an extremely strong August for stocks — the S&P 500 is up 7.2% through Aug. 28 — could be telling us something about who wins the White House in November.

“At first glance, August strength plays well into Donald Trump’s reelection — in the three months prior to November elections, positive S&P 500 returns have accompanied incumbent party presidential victories 85.7% of the time,” Emanuel tells clients in a note.

But going back to 1928, when stocks rose 5% or more in August, and the June to August return was top 25%, the market often struggled in September and October. “And when the S&P 500 is down from the end of August through the Election, the incumbent party has lost the White House on all six occasions,” he notes.

Raising the stakes further, is notes political, social, public health and economic uncertainty against ”a Nasdaq-100 arguably in the midst of a potentially a “blowoff” top move” — a fast and high climb followed by a sharp drop. But he says it is hard to tell if we’re at the start, middle or end of that.

That is laid out by his chart of the Nasdaq-100
NDX,
+0.95%

and the Cboe NASDAQ-100 Volatility Index (VXN), a key measure of market expectations of implied swings in the tech-heavy gauge.

“The last time both NDX and VXN rose together to this degree was January 2018, prior to the period known as ‘Volmageddon,’ which was when Wall Street’s so-called fear gauge — the Cboe Volatility Index
VIX,
+15.02%

surged to a level not seen in 20 years.

His advice: own calls — a bullish bet on an asset that gives an investors the right but not obligation to buy the underlying asset a certain price by a specific date — on the Invesco QQQ
QQQ,
+0.80%

exchange-traded fund that tracks the Nasdaq-100 Index. He also suggests owning puts — a bearish bet that works the opposite of calls — on the iShares Russell 2000 ETF
IWM,
-1.07%

The chart

Goldman Sachs says year-to-date, 43% of female-managed funds have outperformed their benchmarks versus just 41% of those with no female managers.

A team led by Goldman’s chief U.S. equity strategist David Kostin explains: “Men may be from Mars and women from Venus, but female-managed funds tilt toward info tech while non-female managed funds prefer financials.”

Read more here

Random reads

A chilling moment in history remembered as Berlin protesters tried to storm the Reichstag.

Massive pool party lands University of South Carolina students in hot water.

Redditers dish on best industry secrets.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. Be sure to check the Need to Know item. The emailed version will be sent out at about 7:30 a.m. Eastern.

Follow MarketWatch on Twitter, Instagram, Facebook.





Original source link