U.S. stock-index futures on Monday pointed to a slightly higher open even as data over the weekend highlighted the persistence of coronavirus in hot spots, including Florida, Texas and California, fueling concerns about the economic outlook.
Financial markets in the U.S. will be closed on Friday in observance of the Fourth of July holiday.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average YM00, 0.52% YMU20, 0.52% gained 134 points, or 0.5%, at 25,084; those for the S&P 500 ES00, 0.23% ESU20, 0.23% picked up 8.60 points, or 0.3%, at 3,015.35; while Nasdaq-100 futures NQ00, -0.24% NQU20, -0.24% retreated 21 points, or 0.2%, to the 9,844.50.
On Friday, the Dow DJIA, 0.83% put the finishing touches on a weekly decline of 3.3%, declining 700-plus points on the day, while the S&P 500 SPX, 0.40% notched a 2.9% weekly decline and the Nasdaq Composite Index COMP, 0.06% fell 1.9% for the week.
What’s driving the market?
Appetite for risk is limited to start the week as coronavirus cases world-wide surpassed 10 million, with more a half-million deaths. A dozen states, including Florida, Texas, California and Arizona — now hot spots in the U.S. — reversed reopening plans and implemented tighter restrictions to prevent a further spread of the viral epidemic, the Wall Street Journal reported.
Health and Human Services Secretary Alex Azar said that the “window is closing” to manage the resurgence of the epidemic in the U.S., on Sunday during NBC’s “Meet the Press.”
“We’ve got the tools to do this,” Azar said. “But the window is closing. We have to act, and people as individuals have to act responsibility.”
An inability to curtail the spread of COVID-19 will prove problematic for economic projections that factor in a sharp, V-shaped rebound of business activities, which been stalled or closed to address the public health crisis.
The U.S. recorded more than 42,000 new cases Saturday, according to data compiled by Johns Hopkins University, marking a second straight daily total over 40,000, even if it represented a decline from Friday’s record 45,255 tally. Florida, Nevada, George and South Carolina reported a surge in new cases on Saturday, Politico reported.
Meanwhile, in China, industrial profits in May were up 6% from a year earlier, representing the first increase in 2020, official statistics released over the weekend showed.
Investors are expecting some turmoil due the holiday-shortened week and end-of-quarter activity among investment managers, including pensions and mutual funds.
“In summary, with two days left before the quarter dies, window dressing is likely to increase volatility with some sectors gaining over others,” wrote Peter Cardillo, chief market economist at Spartan Capital Securities. “However, the trend is likely to remain negative ahead of this weeks key macro indicators and the upcoming earnings season,” he said, referring to corporate quarterly results that kick of in earnest in the middle of July.
Looking ahead, investors are watching for a report on pending home sales at 10 a.m. Eastern time Monday and a manufacturing survey of the Dallas area from the Federal Reserve at 10:30 a.m. New York Fed President John Williams is set to speak at 3 p.m.
Which stocks are in focus?
How are other assets performing?
West Texas Intermediate U.S. crude CLQ20, 0.49% for August delivery rose 41 cents, or 1.1%, to trade at $38.87 a barrel on the New York Mercantile Exchange. In precious metals, gold futures US:GCM20 rose $1.10, or less than 0.1%, higher at $1,781.40 an ounce.
The 10-year Treasury note yield TMUBMUSD10Y, 0.651% fell was little changed at 0.651% amid inflows into safe-haven assets. Bond prices move inversely to yields.
The greenback was 0.3% lower against a basket of its major rivals, based on trading in the ICE U.S. Dollar Index. DXY, -0.21%
In Asian markets, the Japanese Nikkei NIK, -2.29% lost 2.3%, Hong Kong’s Hang Seng HSI, -1.01% lost 1%, while South Korea’s Kospi declined 1.9%. China’s CSI 300 000300, -0.70% retreated 0.7%, while the Shanghai Composite Index SHCOMP, -0.60% declined 0.6%.