People ride the Staten Island Ferry on Nov. 12, 2020 in New York City. The New York City borough of Staten Island's seven-day positive test rate for Covid-19 is the highest in the city.
Getty ImagesU.S. equity futures pointed to a rebound and European stocks turned positive on Friday, even as concerns over the resurgence of a deadly virus and worries about stimulus continued to dominate.
S&P 500 and Nasdaq-100 futures gained around 0.8% each, and Dow futures were up over 200 points. On Thursday, the S&P lost 1%, the Dow tumbled 317 points and the Nasdaq Composite fell 0.65%, with fading hopes for fiscal stimulus also weighing on investors.
But losses swept across Asia, with the China CSI 300 dropping 1% and the Stoxx Europe 600 was only slowly moving into the green.
The week began with enthusiasm after positive Covid-19 vaccine news from drugmaker Pfizer and partner BioNTech. That drove investors into the so-called value trade—stocks beaten down by the pandemic that would benefit from signs of a strengthening economy.
But news of surging U.S. hospitalizations and record infection levels this week, alongside expectations that a stimulus package won’t arrive in time to prevent further economic damage, returned to haunt investors by midweek.
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A substantial gulf remains between Republicans and Democrats over agreement of a stimulus package, Politico reported on Thursday. The White House has said fiscal stimulus will be left to Republican-controlled Congress. Republicans, who may continue to control Congress for the next four years, are less willing to spend on stimulus than Democrats.
“Many investors only expect a sustainable sector rotation from technology stocks as the pandemic winners to the spurned losers only when the vaccine cannot only be approved but also efficiently distributed in large numbers,” analysts at CMC Markets told clients in a note.
At a European Central Bank panel on Thursday, Federal Reserve Chair Jerome Powell said news of an effective Covid-19 vaccine was welcome, but not an immediate panacea. He said “significant challenges and uncertainties remain about timing production, distribution, and efficacy for different groups.”
Elsewhere, China congratulated President-elect Joe Biden, one of the last major countries to do so. “We respect the choice of the American people,” said a foreign ministry spokesman, Wang Wenbin, according to the Associated Press.
The administration of President Donald Trump, meanwhile, signed an executive order banning Americans from investing in Chinese companies deemed high risk with links to the country’s military.
Producer prices for October will be released ahead of the market open, followed by the University of Michigan’s consumer sentiment index for November.
Among stocks on the move, shares of Disney were rising in premarket trading after the media giant lost less than expected in its latest quarter, and continued to show strong subscriber growth for its streaming unit, which is still unprofitable.
Cisco shares were also rising in premarket after better-than-expected quarterly results, and slightly more upbeat guidance from the networking company.
Shares of Palantir inched up after the data-analytic company reported its first set of results since going public on Sept. 30. Non-GAAP (generally accepted accounting principles) operating income, adjusting for the costs of its recent stock listing, came in ahead of expectations.
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November 13, 2020 at 06:26PM
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U.S. Stock Futures Are Rising After a Virus-Led Selloff - Barron's
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