Traders work during the opening bell on the New York Stock Exchange (NYSE) on March 5, 2020 on Wall Street in New York City.
Johannes Eisele | AFP | fake pictures
Stock futures rose slightly on Sunday night as investors tried to take advantage of last week’s strong performance.
Dow Jones Industrial Average futures were up 40 points, or 0.2%. S&P 500 futures advanced 0.13% while Nasdaq-100 futures gained 0.2%.
The S&P 500 and Dow rose 1.3% and 2.3%, respectively, last week for their third consecutive weekly advance.
Those gains came when investors turned to hitting stock names amid positive news about Moderna’s vaccine trials and a partnership between Pfizer and BioNTech. ViacomCBS, which was down approximately 40% during the year, gained nearly 10% last week. Gap Inc jumped 10.6% in that time period and United Airlines rose 3.8%. The iShares Edge MSCI USA Value Factor (VLUE) ETF was also up 3.5% last week.
But those breakthroughs came at the expense of major tech stocks like Facebook, Amazon, Netflix, Alphabet, and Microsoft. Facebook and Alphabet lost more than 1% last week. Microsoft fell 5.1% in that time period, while Amazon and Netflix fell 7.4% and 10.2%, respectively. Those declines led to the first weekly loss for the Nasdaq Composite in three weeks. These stocks have been firm on Wall Street this year as investors bet that these companies’ business models can keep them growing during the pandemic.
“The whole conversation about a shift away from technology and towards more ‘value’ oriented areas will grow in the coming weeks,” said Douglas Busch, founder of ChartSmarter, in a note. “If we lose technology leadership in any significant way, I think it will negatively affect the overall market.”
“If the sector can rest and stay in the middle of the pack like a smart rider who has plenty of horses underneath him in a thoroughbred race, then he is likely to reappear in the fall.” additional.
The S&P 500 tech sector fell 1.2% last week and was one of two that declined by more than 1% in that time period.
Stimulus in focus
Traders also turned their eyes to Washington as lawmakers begin negotiations on new stimulus measures.
Earlier this year, President Donald Trump signed a stimulus package worth about $ 2 trillion that expanded unemployment benefits for those laid off during the pandemic. These expanded benefits included a check for $ 600 per week. However, these additional payments will expire later this month.
“There is a lot of uncertainty about the size and shape of the next bill, particularly on the consumer side,” said Aneta Markowska, chief financial economist at Jefferies, in a note.
“We think the consensus expects a package of about $ 1- $ 1.5, so if the draft reaches the upper end of that range, it would be seen as a positive surprise,” added Markowska. “In light of the deterioration in growth momentum, it is highly unlikely that Republicans will not do much, which means that the risks are biased towards the high side.”
Coronavirus cases have increased at an alarming rate. Data collected by Johns Hopkins University showed that more than 70,000 cases were confirmed on Saturday. That marks two days in a row of at least 70,000 new confirmed infections.
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