Wall Street is likely to start the week off on the right foot, as futures on the three benchmark indices continue the bullish stance. After four weeks of a disastrous September, equities try to maintain investors’ confidence, though a Wells Fargo analyst said yesterday that it was too risky to bet on stocks these days given the high probability of another correction.
On Friday, the US stock market delivered a great performance, with Nasdaq securing the second-best session in two months. Stock futures continued to increase. At the time of writing, the S&P 500 and Nasdaq futures are up 0.53%, and Dow futures have increased by 0.62%.
Investors are quite tense given the worsening pandemic. On Saturday, the New York state reported over 1,000 new cases, which was the first time since the beginning of June.
Despite the recent boost, the major indices are set to conclude a bearish September, as Nasdaq has tumbled over 7%, while Dow and the S&P 500 have lost 4.4% and 5.8%, respectively.
Equities might continue their bullishness if the $2.4 trillion stimulus bill proposed by Democrats passes the chamber vote later this week. Also, President Donald Trump said that he would nominate Judge Amy Coney Barrett to replace Justice Ruth Bader Ginsburg on the Supreme Court.
Asian stocks are following the positive note initiated by US firms. Still, the uptrend is capped by worries about surging coronavirus cases in Europe and caution ahead of the US election.
At the time of writing, China’s Shanghai Composite is up 0.13%, and the Shenzhen Component edged up 0.17%. Yesterday, China reported an increase in profits at industrial firms for the fourth straight month in August. The country’s industrial profit rose 19.10% y/y, which points to the continuation of economic recovery.
The TikTok saga continues, as US District Judge Carl Nichols temporarily blocked Trump’s ban on the video-sharing app that was about to take effect on Sunday. Nevertheless, the judge refused to block several other restrictions that will come into force on November 12 and will make TikTok impossible to use on the US territory.
Hong Kong’s Hang Seng Index is up 0.73%.
Japan’s Nikkei 225 has gained 1.22%. South Korea’s KOSPI added 1.40%, with the Korea Disease Control and Prevention Agency (KDCA) reporting the lowest number of new COVID cases since the beginning of August.
In Australia, the stock market is moving sideways, as the ASX 200 shows no direction. Victoria State saw a decline in new daily cases to single digits, which allowed it to start easing some restrictions.
European stocks will also benefit from the general bullishness on Monday, even though the continent is now facing a surge in COVID infections and many countries are forced to return to lockdowns.
In the commodity market, oil prices gave up their recovery attempts and continue to decline. Both WTI and Brent are set to post the first monthly decline since April-May. Investors are worried that the rapid increase in coronavirus infections will hurt recovery in demand. Currently, both brands are down over 0.90%.
In the US, the coronavirus finds new victims in Southern states and other regions, causing fears of mobility restrictions and a decline in crude demand. Besides this, investors are worried about an oversupply, as Libyan has restarted oil exports.
Gold has declined in early trading on Monday, as investors focused on strong equities. The metal will decide the next move later this week when the Democrats’ $2.4 trillion stimulus bill is put to the vote. The debate between Trump and Biden will have a major impact on gold, which has lost 0.33% today and trades at around $1,860.
In FX, the dollar has retreated from its two-month highs, as investors are worried that the US economic recovery is losing steam. The USD Index is down 0.12% to 94.567. Still, the euro isn’t performing any better right now, moving in tandem with the greenback. The European Central Bank officials are currently debating whether further stimulus is needed amid weakening recovery and an increase in COVID infections.
The British pound has gained over 0.20% against both the USD and the euro amid cautious Brexit optimism, as another round of trade talks between the UK and the bloc will start later this week.