Contracts on the three major indices rose Sunday night, revamping the S&P 500 to reach record highs again.
Gold futures (GC = F) hit higher Sunday night, after futures closed below $ 2,000 on Friday and posted their first weekly decline since June. This week, trading in Treasuries is also set to be watched closely, after the 10-year Treasury yield (^ TNX) broke above 70 basis points for the first time in more than a month last week.
Uncertainty over the future of US-China relations escalated over the weekend after a meeting between U.S. and Chinese negotiators on Saturday on the terms of their Phase 1 trade deal was halted, according to reports from stores including CNBC and Bloomberg. The talks, which were set to include a video conference between Chinese Deputy Prime Minister Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, have been delayed indefinitely.
Elsewhere in politics, the Democratic National Convention begins this week as a predominantly virtual event, in which former Vice President Joe Biden is set to accept the presidential nomination in addition to his recently announced running mate sen. Kamala Harris. On the advance-related stimulus front, lawmakers remain on the recession from August to mid-September, with no apparent discussions between top negotiators over another package for coronavirus relief that has taken place in more than a week.
Business season is set this week, though a host of major retailers including Target (TGT), Walmart (WMT), Home Depot (HD) and Lowe’s (LOW) are still set to report results. The economic data calendar will include a host of housing market data – including monthly start of housing, building permits and existing reports for home sales – along with the release of the Federal Open Market Committee (FOMC) meeting minutes on Wednesday.
Amid these developments, equities have remained just short of record levels as market participants wait for the next catalyst to launch higher. Goldman Sachs analysts last week said they saw room for the S&P 500 to ride up to 3,600 amid rapid U.S. economic growth and faxing outlook. And Fundstrat’s head of research, Tom Lee, last week increased its price target on the S&P 500 by 75 points to 3,525, reflecting the potential for “reopening” stocks hit hardest by the pandemic surrounding the rise in the other sectors in the past few months.
However, with the S&P 500 lifting less than 1% from February’s record high – and briefly exceeding this level last week – some analysts have struck a cautious tone.
‘It’s quite remarkable that we’re reaching for these new heights. The market is currently ignoring many major risks. The tensions in terms of fiscal stimulus in Washington, which continue to be dispelled. Of course, this kind of renewed division in relations between the US and China, and let us not forget, in 82 days we have a presidential election here in the US, “said Emily Roland, John Hancock Investment Management co-Chief Investment Strategist, last week to Yahoo Finance. “So if we were not too much in 2020, we would also go to a very political environment. Shares are currently priced for perfection. We have a 22x forward-looking PE on the S&P 500, and real investors are ignoring some of these major risks. “
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6:04 pm ET Sunday: Stock futures open higher
Here were the main movements in stock markets, starting at 18:04 ET:
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S&P 500 futures (ES = F): 3,366.25, up 4.75 points, if 0.14%
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Dow futures (YM = F): 27,847.00, up 55 points, to 0.2%
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Nasdaq futures (NQ = F): 11,152.5, up 18.75 points, or 0.17%
Traders are working on the floor at the closing clock of the Dow Industrial Average on the New York Stock Exchange on March 18, 2020 in New York. – Wall Street shares plummeted again on March 18, 2020 when the economic toll of the coronavirus mounts and economists warn of a deep recession. The Dow Jones Industrial Average tumbled 6.3 percent, or more than 1,300 points, to close the day at 19,903.50. The index fell as much as 10 percent earlier in the session, which saw trading stop again. (Photo by Bryan R. Smith / AFP) (Photo by BRYAN R. SMITH / AFP via Getty Images)
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