U.S. Stock Futures Rally Ahead of Economic Data
October 01 2020 - 5:51AM
Dow Jones News
By Caitlin Ostroff
U.S. stock futures rose Thursday, following the S&P 500's
best six-month performance since 2009 as central banks' stimulus
measures keep markets buoyant.
Futures tied to the S&P 500 gained 0.7%, indicating that the
broad market gauge could climb after the New York opening bell.
Despite a decline in September, the benchmark is up about 27% over
the two quarters ended Wednesday.
Some investors are hopeful that an economic rebound in recent
months will have resulted in corporate earnings that beat
expectations when companies start reporting third-quarter results
later this month. Appetite for risky assets that typically generate
higher returns--including stocks--continue to be buoyed by the
flood of cheap money unleashed by central banks and
governments.
"If you look at the market, it's telling you that we're going to
get a recovery next year. I'm convinced we're in a new bull
market," said Patrick Spencer, managing director at U.S. investment
firm Baird. "Even with the election, behind all that is central
banks and liquidity."
Investors continue to assess whether Congress will pass another
aid package that would bolster U.S. economic growth ahead of the
elections, though such hopes have largely receded in recent
weeks.
A renewed burst of optimism this week--prompted by talks between
Republican and Democratic leaders--began to fade on Wednesday after
the House postponed a vote on a $2.2 trillion package. Democrats
are trying to find common ground with the White House on a
bipartisan agreement, though they remain far apart on key
issues.
"The big wildcard in the U.S. is whether we get more fiscal
spending or not," said Gregory Perdon, co-chief investment officer
at private bank Arbuthnot Latham. "The political backdrop is just
so toxic."
Coronavirus infections are another point of focus. Infection
rates in the U.S. have remained elevated for some months, and
health-experts have warned that the colder months may bring a new
wave of infections. While investors don't expect to see a repeat of
the spring's stringent lockdowns, fresh restrictions could threaten
recovery in the labor market and weigh on consumer spending, which
accounts for more than two-thirds of the U.S. economy.
Data on how many Americans applied for unemployment benefits for
the first time through the week ended Sept. 26 is due at 8:30 a.m.
ET, and will offer the most timely view on the health of the labor
market. The Department of Commerce will also release new figures at
8:30 a.m. showing whether American consumers continued to boost
spending in August.
The Institute for Supply Management's September purchasing
managers index for manufacturing, due out at 10 a.m., is likely to
reflect a strong rebound in factory activity amid a slow global
recovery and strong domestic demand for autos, electronics and
other goods.
In bond markets, the yield on the benchmark 10-year Treasury
ticked up to 0.696%, from 0.677% Tuesday.
Overseas, the pan-continental Stoxx Europe 600 edged up less
than 0.1%.
Among European equities, shares in Bayer fell almost 11% after
the German chemicals and pharmaceuticals company said the
coronavirus pandemic would hit its crop-science business harder
than anticipated as prices for various crops fell.
STMicroelectronics rose 6.1% in Milan after the chipmaker raised
its 2020 revenue outlook following stronger-than-forecast
third-quarter revenue.
https://www.wsj.com/articles/bayer-to-cut-more-costs-as-farm-business-hurts-11601501509
In Asia, the Tokyo Stock Exchange halted all stock trading for
Thursday due to a system problem, and said it expects to resume
normal trading Friday. Markets in China, Hong Kong and South Korea
were closed for a holiday.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
October 01, 2020 05:36 ET (09:36 GMT)
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