Dow Futures Gain on Boeing Strength; Global Stocks Weaken As Coronavirus Infections Top 10 Million

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U.S. investors face a busy holiday-shortened week this week with Fed Chairman Jerome Powell testifying before Congress Tuesday and the June jobs report slated for Thursday.

The Monday Market Minute

  • Global stocks slide to a two-week low as coronavirus infections top 10 million and investors question the strength of the economic recovery.
  • U.S. states pause or reverse re-opening plans amid a renewed spike in infections as ‘second wave’ concerns keep domestic stocks in check.
  • Oil slides as investors see weaker near-term demand against new COVID-19 concerns, as well as confusion as to OPEC’s next steps on production cuts.
  • Boeing shares help support U.S. stocks as planemaker looks to start test flights of the troubled 737 MAX as early as this week.
  • U.S. equity futures suggest a firmer open for Wall Street ahead of a busy holiday-shortened week for economic data, including pending home sales Monday, Fed Chairman Jerome Powell’s Congressional testimony Tuesday, and the June jobs report slated for Thursday. 

U.S. equity futures edged higher Monday, while global stocks slumped to the lowest levels in two weeks, as investors continue to grapple with improving recovery data that overshadows rising coronavirus infections in the United States.

More than 500,000 people around the world have died as a result of the novel coronavirus, known to health officials as COVID-19, since it was first identified in the central industrial city of Whuan earlier this year. Global infections, meanwhile, have topped 10 million, according to the Johns Hopkins University tracker.

In the United States, a resurgence of new infections, as well as a steady rise in hospitalizations, in certain southern states — including Texas and Florida — has compelled some Governors to pause, or reverse, re-opening plans amid concern for a second wave of the virus that could damage national recovery hopes.

The emphasis on COVID-19 infections has turned U.S. stocks red for the month of June, and triggered the largest outflow of equity funds — $6.6 billion — in early two months, according to ‘Flow Show’ data from Bank of America last week.

The rise in infections has also belied data showing slow but steady improvements in manufacturing output, consumer spending and employment, although weekly jobless claims were modestly higher than expected last week ahead of Thursday’s June payroll report.

That said, Wall Street is still looking to start the holiday-shortened week on a positive note, with contracts tied to the Dow Jones Industrial Average priced for a 135 point opening bell gain and those linked to the S&P 500, which is down 1.2% for the month, set to open 14.4 points higher. 

Boeing  (BA) – Get Report shares are likely to be in focus today, with the planemaker rising 3.7% in pre-market trading amid reports that the planemaker, as well as the Federal Aviation Administration, will begin test flights of the grounded 737 MAX aircraft, as soon as this week.

Facebook  (FB) – Get Report shares, however, extended their recent decline, falling 2.6% in pre-market dealing after more than 160 companies have joined a proposed boycott of the social media group’s advertizing platform amid criticism of its policy on hate speech and misinformation.

European stocks, however, were modestly weaker at the start of trading in Frankfurt, with the Stoxx 600 sliding 0.4% and Britain’s FTSE 100 falling 0.4% in London.

Away from equities, the U.S. dollar index, which tracks the greenback against a basket of six global currencies, slipped 0.1% from Friday’s two-week high to trade at 97.329 while benchmark 10-year Treasury note yields held at 0.651%.

Global oil prices were also on the back foot, extending declines into a second consecutive session amid concern for global demand in a waning economic recovery and ongoing confusion over the fate of OPEC+ production cuts into the second half of the year.

WTI contracts for August delivery, the U.S. benchmark, traded 74 cents higher from their Friday close in New York and changing hands at $37.75 per barrel in early European dealing while Brent contracts for August, the global benchmark, were seen 79 cents lower at $40.23 per barrel.

Overnight in Asia, Japan’s Nikkei 225 slumped 2.3% to close at 21,995.04 points while the region-wide MSCI ex-Japan benchmark was seen 0.9% lower heading into the close of trading, lead to the downside by weakness in Hong Kong, China and South Korea.