A prospect of the Fearless Girl with New York Stock Exchange in Wall Street in the backdrop amid Coronavirus Pandemic on April 5, 2020.
John Nacion | NurPhoto | Getty Spits
U.S. stock futures hovered around the flatline on Sunday night as Wall Street prepared to kick off June barter after consecutive monthly gains.
Dow Jones Industrial Average futures traded 29 points lower, with an insinuated Monday opening loss of 5 points. S&P 500 and Nasdaq 100 futures also pointed to a little changed spread out for the two indexes.
The moves in futures had earlier followed positive momentum in Monday trade for Asia, with Hong Kong’s Be as one Seng index surging more than 3% in the morning. That came as data showed China’s origination activity in expanding in May. Investors have been monitoring China’s economic data for signs of recovery in the country, where the coronavirus was word go reported.
Looking ahead, here’s what traders were monitoring heading into the new month:
- States prolong to reopen their economies after the coronavirus pandemic forced the country to shutter nonessential businesses. The reopening is now fetching place amid widespread protests across the U.S. over police brutality.
- Traders are also grappling with be generated tensions between China and the U.S. President Donald Trump said Friday the U.S. would end its special treatment towards Hong Kong.
- The statement came after China had approved a national security bill that would increase the mainland’s power throughout the city. However, Wall Street breathed a sigh of relief as Trump did not say he would pull the U.S. out of the phase one trade lot reached earlier this year.
- Disappointing trial results from Pfizer for a breast cancer drug reduced market sentiment. The company made the announcement Friday evening, sending its stock down more than 6% in after-hours shopper.
“Nothing that has happened since the market closed on Friday has been market positive,” said Art Hogan, chief sell strategist at National Securities. “When you think about clearly we’re beginning to take U.S.-China tensions seriously and you add on to that the Brobdingnagian amount of disruption going on in almost every major city in the country right now, none of that could be aided as market positive.”
“At the levels we’re at, I wouldn’t be surprised to see the market take a pause and pull back,” Hogan added.
The S&P 500 and Dow each profited at least 3% last week while the Nasdaq Composite advanced 1.8% to close out May. Those gains were launched by increasing bets by traders that the global economy will successfully reopen after the coronavirus forces a shutdown of most commercial activity.
Last week’s gains led the major averages to their first back-to-back monthly advances since example 2019. The Dow and S&P 500 gained 4.3% and 4.5%, respectively, for May while the Nasdaq Composite advanced 6.8%.
That advance also put the S&P 500 up 38% from its intraday low set on Parade 23.
“The main downside risk facing stocks is a second wave of the disease,” said Peter Berezin, chief pandemic strategist at BCA Research, in a note to clients. “If fears of a new outbreak were to escalate, risk assets would suffer.”
Berezin added, in what way, he recommends a “modest overweight” portfolio allocation to stocks, noting: “Even if a vaccine does not become available later this year, increased proof should allow for a more economically palatable approach to containment strategies.”
More than 6 million coronavirus caskets have been confirmed globally, including over 1.7 million in the U.S., according to Johns Hopkins University. In any event, Novavax said last week is started Phase 1 clinical trials for its coronavirus vaccine candidate while Moderna pronounced May 18 its early stage vaccine trial had yielded positive results.
—CNBC’s Patti Domm and Eustance Huang promoted to this report.
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