Monday’s market minute
- Global stocks are declining as coronavirus infections rise at a record rate over the weekend, with a global total of more than 14.4 million, with more than 600,000 deaths.
- Infections in the US continue to increase at a faster rate than testing, and hot spots in Florida and California trigger further closure discussions.
- European leaders extend talks on a 1.85 trillion euro budget and a rescue package after negotiations over the weekend failed to make a breakthrough.
- Commodity prices fall, with oil trading in the red, as investors gauge slower growth in the near term in the face of a second global wave of coronavirus.
- However, vaccine hopes keep the losses under control as the market awaits key data from an early-stage trial in human participants conducted by AstraZeneca and the University of Oxford.
- US equity futures suggest a moderately weaker opening on Wall Street ahead of Haliburton earnings before the bell and IBM after the close of trading.
US equity futures started the week on Red Monday as investors tracked a recorded weekend for global coronavirus infections, led by the United States, amid growing concern from that a resurgence of the disease could nullify hard-earned progress in major economies around the world. the world.
The World Health Organization said global infections hit a record high for two consecutive days over the weekend, with a global total of more than 14.4 million, with more than 600,000 deaths. In the United States, where infections are increasing at a rate three times faster than the increase in national tests, confirmed cases have exceeded 3.7 million, with 140,000 deaths.
The impact of this internal resurgence is already being felt at ‘hotspots’ across the country, such as Los Angeles and Miami, where local officials are considering new business closings and social restrictions when announcing or planning changes for the upcoming school year. .
Economic data is also beginning to feel the impact, with unemployment week data from last week showing no improvement over the previous seven-day period, and home start figures and building permits still below last year’s levels for the month of June.
Meanwhile, with around 47 of the S&P 500 reporting so far this earnings season, and 88 to come later this week, collective earnings are forecast to drop 43.7% from last year, with a drop close to 11 % in overall revenue, as companies factor in the worst of the pandemic closings earlier this year.
Heavy weights like Amazon (AMZN) – Get reportMicrosoft (MSFT) – Get report, AT&T (T) – Get reportIntel (INTC) – Get report, Lockheed Martin (LMT) – Get report and Coca-Cola (KO) – Get report to report quarterly earnings this week, with a key report also expected from Tesla (TSLA) – Get report On Wednesday, that could cement the electronic car maker’s inclusion in the S&P 500.
However, some optimism was seen in the market on Monday, in the form of a potential promise of Britain’s AstraZeneca coronavirus vaccine. (AZN) – Get report, who will publish details of his recent trials with Oxford University later today in The Lancet medical journal, as well as modest progress in marathon talks between European Union leaders on a € 1.85 billion budget and package regional rescue.
Still, Wall Street is likely to remain cautious for much of Monday’s session, with contracts tied to the Dow Jones Industrial Average priced at 75 opening points and those linked to the S&P 500 suggesting a 6.75-point pullback. For the general public. reference point.
The US Dollar Index, which tracks the greenback against a basket of six global currencies, declined 0.1% to 95.84 in early European trading as the euro rose to a four-month high of 1.1452 in hopes of a budget and bailout across the EU deal. Yields on 10-year Treasury bonds fell to 0.618%.
Oil prices also fell, amid concerns that data from business and factory opinion polls later this week shows a silent appetite for key commodities as economies shrink to a second wave of the virus.
WTI contracts for delivery in August, the US benchmark, have been trading 18 cents lower since their Friday closing in New York and changed hands at $ 40.41 a barrel early in the European trade, while Brent contracts for September, the global benchmark, 30 cents lower at $ 42.84 per barrel
In Europe, gains in the euro, as well as reports of new spikes in infection in Asia, South America and the United States, displaced the bulls on Monday as investors watched closely the events in Brussels, where leaders of the EU meet for the fourth day. to develop details of your regional spending package.
That said, the Stoxx 600 Europe benchmark was 0.35% higher in opening hours, with a 0.44% decrease for the FTSE 100 in London and a 0.5% gain for the DAX performance index in Frankfurt.
Overnight in Asia, a move by Chinese authorities to improve local markets added weight to both the Shanghai Compound and the technology-focused CSI300, as regulators raised a cap on capital ownership for insurance companies and lobbied for increased merger activity in financial services. sector.
As a result, Chinese stocks rose 3.1%, but weaker markets in the region kept the ex-Japan benchmark MSCI at + 0.18% in the last few hours of trading, while renewing concerns Japan’s export-centric economy, as well as a resurgence in coronavirus infections in Tokyo led the Nikkei 225 to a session decline of 0.1%, setting the benchmark at 22,717.48 points at the close of business.
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