Tuesday’s market minute
- Global stocks fall after last night’s sell-off on Wall Street as global coronavirus infections top 13 million.
- Infections in the US continue to rise to 3.3 million, with 135,000 deaths, prompting business closings in California and questions about the pace of the national economic recovery.
- China’s trade data surprises to the upside, with a 2.7% increase in imports, but the United States’ trade surplus remains elevated to $ 29.4 billion in June.
- Oil prices extend the pullback as the dollar discovers that buyers and investors question the strength of demand, and the OPEC ministerial meeting is scheduled for Wednesday.
- US stock futures suggest a firmer opening on Wall Street ahead of JPMorgan, Citigroup and Wells Fargo second-quarter earnings and June inflation data at 8:30 am ET.
US stock futures rose higher on Tuesday, after a wild session on Wall Street yesterday that saw the Dow return nearly 600 points in an afternoon slump, as investors track bank earnings, tensions between the United States and China and the accelerated coronavirus infections in the main economies of the world.
However, traders could still be rocked by yesterday’s sell-off, as well as a steady rise in the CBOE’s key volatility indicator, the VIX, is likely to keep investors cautious at the start of trading.
JPMorgan (JPM) – Get reportHowever, it could have stabilized those nerves after the largest US bank posted stronger-than-expected second-quarter earnings and maintained its quarterly dividend, despite neglecting massive credit loss provisions of $ 10.5 billion.
After reaching its highest levels since February 25 yesterday afternoon, the S&P 500 fell into negative territory at the close of trade, which led to the downside by taking profits on big tech names like Amazon. (AMZN) – Get reportMicrosoft (MSFT) – Get report and Facebook (full board) – Get report.
The measures suggest that investors may be ready to put a cap on recent earnings, which have seen a nearly 40% rise in stocks from their lowest point in late March, if second-quarter earnings, and the earnings orientation towards the end of the year, disappoint.
Increased rates of coronavirus infection could certainly affect the visibility of earnings, with the closure of bars and restaurants in California, the delay in opening schools in Los Angeles and the outbreaks of new outbreaks in Australia and the UK. United.
Globally, more than 13 million cases have been recorded since the outbreak began in early January, with more than one million confirmed in the past five days alone.
Tensions between the United States and China, which have escalated last week when Washington criticizes Beijing’s handling of the outbreak, its interference in Hong Kong politics, and its demand for offshore resources in the South China Sea, They could also increase overall market stealth, which kept Overnight Profits Limit in markets around the world.
However, Wall Street appears to be ready for a positive open, with futures contracts linked to the Dow Jones Industrial Average with a modest profit price of 130 points and those linked to the S&P 500 that suggest a 12 point advance at the start of trading. .
However, European stocks fell lower at the start of trading, extending overnight falls in Asia, even as investors applauded stronger-than-expected trading data in China and looked for positive signs that the European Union would approve a $ 1.2 trillion coronavirus stimulus package later this week.
The Stoxx 600 Europe benchmark, the region’s most comprehensive measure of stock prices, was 1.3% lower in early trading, leading to a 1.5% drop in the stock index. DAX performance from Germany and a drop of 0.33% for the FTSE 100 in Great Britain.
Overnight in Asia, Chinese customs officials said June exports increased 0.5% by surprise compared to last year, while imports increased 2.7%, suggesting an improvement in demand. internal and a stronger rebound of factories in the second largest economy in the world.
China’s trade surplus with the United States, a long-term focus of President Donald Trump, was set at $ 29.4 billion, just $ 500 million over the same period last year and more than $ 27.8 million in May.
In stocks, the ex-Japan benchmark MSCI index across the region fell 1%, spurred by declines in Hong Kong and Shanghai, while Japan’s Nikkei 225 ended the session 0.87% lower at 22,887.01 points.
World oil prices also extended declines on Tuesday, despite stronger trade data from China as a firmer US dollar and the specter of a decline in OPEC output cuts later this week kept at bay to the bulls.
WTI contracts for August delivery, the US benchmark, have traded 26 cents lower since their close Monday in New York and changed hands at $ 39.77 a barrel in early European transactions, while Brent contracts for August, the global benchmark, were 26 cents lower at $ 42.46 a barrel
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