U.S. Stock Futures Point to Fourth Week of Declines
September 25 2020 - 5:20AM
Dow Jones News
By Anna Isaac
U.S. stock futures wobbled Friday, putting the S&P 500 on
course for a fourth straight week of losses.
Futures tied to the S&P 500 drifted between gains and
losses, indicating another day of choppy trading after the opening
bell. The index is down more than 2.2% so far this week. Contracts
tied to the tech-heavy Nasdaq also wavered in a narrow range.
Investors' confidence has been crimped by elevated levels of new
coronavirus infections in the U.S. and Europe, as well as some
signs that the global economic recovery is slow and uneven. The
uncertainty and political risks generated by November's
presidential election is also adding to the jitteriness in
markets.
"We're in a bit of a holding pattern. It feels like a bit of a
phony market right now. I don't think there's any key factors that
have changed," said David Coombs, head of multiasset investments at
Rathbone Brothers. "Until we get a vaccine for the population at
large, the coronavirus course is uncertain."
Investors are also awaiting signs of progress on additional U.S.
stimulus spending from the government. House Democrats are readying
a scaled-down package of around $2.4 trillion that would include
assistance to airlines, restaurants and small businesses, according
to people familiar with the matter. But Republicans said the
chances of a deal before Election Day remained slim.
"We've had such a huge fiscal response already, it's easy to say
the response now is disappointing," said Holger Schmieding, chief
economist at Berenberg Bank. "It's basically a matter of time:
before or after the election. Significant support is coming. The
Fed is asking for it."
New data on durable goods orders, due out at 8.30 a.m. ET, will
offer investors a view on whether U.S. manufacturers have continued
to stage a rebound from shutdowns and supply-chain disruptions
related to the pandemic. Orders in August for products designed to
last at least three years are likely to post their fourth
consecutive monthly gain. But economists are forecasting a slowdown
in the pace of improvement in overall demand and underlying
business investment amid uncertainty about the path of
Covid-19.
Economic data will need to show continuous improvement if gains
in stocks are going to be sustained, investors warned.
"As we go into the fourth quarter, risks are starting to pile
up, making it harder for equities to make gains. It's the election
risk, the Covid risk, and the fiscal risk," said Seema Shah, chief
strategist at Principal Global Investors. "And then of course the
economic data: we've had all the easy gains in the third quarter
and we want to be sure that momentum isn't running out."
In bond markets, the yield on the U.S. 10-year Treasury was
largely unchanged at 0.661%, from 0.664% Thursday.
Overseas, the pan-continental Stoxx Europe 600 edged down
0.2%.
The major Asian equity benchmarks ended the week on a mixed
note. Japan's Nikkei 225 rose 0.5% Friday, while China's Shanghai
Composite Index ticked down 0.1%.
Write to Anna Isaac at anna.isaac@wsj.com
(END) Dow Jones Newswires
September 25, 2020 05:05 ET (09:05 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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