U.S. Stock Futures Muted Ahead of Economic Data
December 03 2020 - 5:57AM
Dow Jones News
By Anna Hirtenstein
U.S. stock futures wobbled Thursday ahead of economic data that
will provide insights into the health of the services sector and
the labor market.
Futures tied to the S&P 500 were relatively flat, a day
after the broad-market index inched up to close at another all-time
high. Nasdaq-100 futures rose 0.2%, pointing to muted gains in tech
stocks after the opening bell.
Trading has been choppy this week as November's explosive rally
in global stocks lost steam. The S&P 500 has repeatedly eked
out fresh records on the back of investors' optimism that Covid-19
vaccines will accelerate the economic rebound next year. But rich
valuations for stocks and elevated infection levels are tempering
some of that cheer, leading to a more subdued move upward in recent
days.
"Markets have been driving higher, seeing 2021 as the year
economies will snap back," said Peter Dixon, an economist at
Commerzbank. "There is concern a lot of the good news is already
priced in, so I don't expect markets to go shooting into the
stratosphere any time soon, but we could see a general grind
higher."
Weekly jobless claims, seen as a proxy for layoffs, will be out
at 8:30 a.m. ET. A recent increase in the number of workers seeking
unemployment benefits is expected to have steadied last week. That
suggests the labor market is still healing at a time when more
states bring back restrictions to address a surge in new
coronavirus cases.
The results of surveys of purchasing managers in the services
sector, due to be released starting at 9:45 a.m. ET, will shed
light on a part of the economy that has been badly hit by the
pandemic. Investors are looking for signs of improved business
sentiment among travel and finance companies as well as restaurants
and bars, all of whose operations were disrupted by lockdown
measures this year.
The number of Covid-19-related deaths reported in a day hit a
record in the U.S., and newly reported infections were at their
second highest, surpassing 200,000 for the second time in less than
a week. Hospitalizations for coronavirus cases also surpassed
100,000 on Wednesday. The influx is widely expected to continue
into the winter.
Oil prices were jittery on reports that OPEC and its allies are
close to reaching a deal to increase production next month. Brent
crude, the international benchmark, slid 0.4%. Energy ministers are
scheduled to meet later on Thursday to formalize a deal.
In bond markets, the yield on the 10-year U.S. Treasury note
edged down to 0.934%, from 0.948% on Wednesday.
The dollar continued to weaken against a basket of currencies
for the third straight day, with the ICE U.S. Dollar Index sliding
0.2% and reaching its lowest since April 2018.
The currency's retreat is "partly due to liquidity from the Fed,
which is still increasing -- but at a lower rate -- and higher risk
sentiment, " said Shaniel Ramjee, a multiasset fund manager at
Pictet Asset Management. "You can see capital flowing out of the
U.S. as investors are wanting to take advantage of that higher
yield in emerging markets."
Overseas, the pan-continental Stoxx Europe 600 slipped 0.3%, and
is on track for a muted drop this week. The gauge is lagging behind
major U.S. stock indexes, and is over 10% below the record it hit
in February.
Europe continues to battle another wave of Covid-19 infections,
with Germany's leader Angela Merkel extending the country's partial
lockdown into January. European regulators are expected to make a
decision on approving the use of coronavirus-vaccine candidates at
the end of the month.
Speedier moves by the U.K. and the U.S. will give those nations
an edge, and could make their stocks more attractive, investors
said. The British medicines' authority this week became the first
major western regulator to sign off on a shot, and U.S. officials
are scheduled to review test results next week.
"Europe seems to be the laggard when it comes to vaccine
rollouts, it seems like it will take longer to approve," said Mr.
Ramjee. "And logistically, Europe is more fragmented and might not
be uniform."
In Asia, most major benchmarks ended the trading session
higher.
The Shanghai Composite Index edged down 0.2% by the close.
American lawmakers on Wednesday approved legislation that could
result in a trading ban on the shares of U.S.-listed Chinese
companies over concerns about their audit quality.
Write to Anna Hirtenstein at anna.hirtenstein@wsj.com
(END) Dow Jones Newswires
December 03, 2020 05:42 ET (10:42 GMT)
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