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Beyond the Numbers

Futures Pointing To Mixed Open On Wall Street
5/28/2020 9:22 AM

The major U.S. index futures are currently pointing to a mixed opening on Thursday, with the Dow futures up by 226 points but the Nasdaq futures are down by 72.25 points.

Following the advance seen in the session on Tuesday, stocks saw further upside during the trading day on Wednesday.

With the upward move on the day, the Nasdaq reached its best closing level in over three months, while the Dow and the S&P 500 ended the session at their best closing levels since early March.

The Dow surged up 553.16 points or 2.2 percent to 25,548.27, the Nasdaq climbed 72.14 points or 0.8 percent to 9,412.36 and the S&P 500 jumped 44.36 points or 1.5 percent to 3,036.13.

The strength on Wall Street came as traders continued to express optimism about a quick economic recovery as the country reopens following the coronavirus lockdown.

Financial stocks helped to lead the way higher on the day, with the KBW Bank Index and the NYSE Arca Broker/Dealer Index spiking by 6.7 percent and 5.1 percent, respectively.

Substantial strength was also visible among housing stocks, as reflected by the 5.1 percent jump by the Philadelphia Housing Sector Index.

Steel, oil service, tobacco and telecom stocks also saw considerable strength, moving higher along with most of the other major sectors.

Commodity, Currency Markets

Crude oil futures are dipping $0.13 to $32.68 a barrel after tumbling $1.54 to $32.81 a barrel on Wednesday. Meanwhile, after slipping $1.40 to $1,726.80 an ounce in the previous session, gold futures are climbing $12.20 to $1,739 an ounce.

On the currency front, the U.S. dollar is trading at 107.72 yen, unchanged versus the 107.72 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1039 compared to yesterday’s $1.1006.

Asia

Asian stocks turned in a mixed performance on Thursday as stimulus announcements by Japan and the European Commission failed to ease investor concerns surrounding rising U.S.-China tensions.

China's Shanghai Composite index edged up 0.33 percent to 2,846.22, while Hong Kong's Hang Seng index ended down 0.72 percent at 23,132.76 on concerns that a new security law will end the city's autonomy.

U.S. Secretary of State Mike Pompeo announced on Wednesday that Hong Kong no longer merits special treatment under U.S. law, following Beijing's plan to impose a controversial new security law on the territory.

The declaration could have major implications for Hong Kong's status as a global financial and trading hub.

A punitive U.S. response to China on the issue of Hong Kong may prompt Beijing to take some proportionate countermeasures, further straining ties between the world's two largest economies.

Japanese shares extended gains to close at a fresh three-month high on optimism about economic recovery from the pandemic.

The Nikkei average jumped 497.08 points, or 2.32 percent, to 21,916.31, the highest close since Feb. 27, a day after the Cabinet approved a 31.91 trillion yen ($296 billion) second supplementary budget for the fiscal year through next March to reduce the social and economic impacts of the coronavirus outbreak.

The broader Topix index closed 1.80 percent higher at 1,577.34, the highest since Feb. 26.

Dentsu Group shares soared 16.4 percent after the company said it is looking to make a 7 percent cut in global costs.

Nissan surged 8.2 percent and Mitsubishi Motors climbed 6.4 percent after reaffirming their commitment to a three-way alliance with French automaker Renault.

Australian markets rallied after Reserve Bank of Australia Governor Philip Lowe said an economic recovery by spring was possible, following an easing of coronavirus trading restrictions.

The benchmark S&P/ASX 200 index climbed 76.10 points, or 1.32 percent, to 5,851.10, while the broader All Ordinaries index ended up 72.90 points, or 1.24 percent, at 5,957.80.

Banks ANZ, NAB and Westpac climbed 4-5 percent, while Commonwealth Bank advanced 2.2 percent. Bendigo and Adelaide Bank surged 4.1 percent after the regional lender announced it would make a provision of A$148.3 million for potential future impacts due to the Covid-19 pandemic.

Miners BHP, Rio Tinto and Fortescue Metals Group gained 2-3 percent, while gold miner Evolution Mining soared 4.3 percent.

News Corp rose 1.1 percent. The media company said that the bulk of its regional and suburban community papers in Australia will go digital only from June 29, leading to job losses.

Australia's total new capital expenditure fell 1.6 percent sequentially in the first quarter, slower than the 2.6 percent decline in the fourth quarter of 2019, official data showed today. Economists had forecast another 2.6 percent drop in the first quarter.

Seoul stocks finished marginally lower after the Bank of Korea cut its policy interest rate by a quarter percentage point to a record low, saying economic growth in the country has slowed considerably. The benchmark Kospi slipped 0.13 percent to 2,028.54.

Europe

European stocks rose on Thursday to extend gains for the fourth straight session on optimism that efforts to ease lockdown restrictions on businesses and people will contribute to quick economic recovery.

Fresh fiscal stimulus proposals from the European Union and Japan also helped underpin investor sentiment.

The European Union proposed Wednesday a €750 billion stimulus program to help limit the damage inflicted by the coronavirus pandemic.

The Japanese Cabinet approved a 31.91 trillion yen ($296 billion) second supplementary budget for the fiscal year through next March to reduce the social and economic impacts of the coronavirus outbreak.

On the data front, Eurozone economic confidence improved in May from a record low, survey data from the European Commission showed.

The economic sentiment index rose to 67.5 in May from 64.9 in the previous month. However, the reading was below economists' forecast of 70.3.

The pan European Stoxx 600 climbed 1.1 percent to 353.45 after closing up 0.2 percent on Wednesday.

The German DAX rose 0.6 percent, France's CAC 40 index gained 0.9 percent and the U.K.'s FTSE 100 was up 0.4 percent.

Roche Holding gained nearly 2 percent. The company said it has initiated a late-stage trial of a two drug combination to treat patients with severe Covid-19 pneumonia.

Shares of Scandinavian Airlines System plunged 11 percent in Sweden after the company reported a sharply wider net loss in its second quarter, hurt by weak demand amid Covid-19.

Fresenius SE & Co rose over 1 percent after its Kabi unit and German pharmaceutical company medac entered into a marketing agreement for treatments of rheumatic illnesses.

Industrial design services company Bertrandt Group rallied 2.5 percent despite reporting a fall in first-half profit.

Capgemini advanced 1.3 percent after it established a joint venture with Audi AG to provide digital technology and consulting services.

Aerospace giant Safran gained 1.6 percent after Boeing Co said it had resumed production of its 737 MAX passenger jet at its Washington plant.

Shares of easyJet jumped over 5 percent after the low-frills airline confirmed it would restart a number of flights on 15 June. The airline also announced plans to cut up to 30 percent of its workforce to cope with the collapse in demand.

Engine maker Rolls-Royce Holdings slumped 7 percent.

GlaxoSmithKline rose 1.3 percent. The company said it plans to produce 1 billion doses of vaccine efficacy boosters, or adjuvants, next year.

Shares of Cineworld Group jumped as much as 23 percent after the movie-chain operator said it negotiated a covenant waiver.

Media firm Daily Mail and General Trust tumbled 5 percent as it reported a 44 percent fall in first-half profit.

U.S. Economic Reports

New orders for U.S. manufactured durable goods showed a substantial decrease in the month of April, according to a report released by the Commerce Department on Thursday.

The report said durable goods orders plunged by 17.2 percent in April following a revised 16.6 percent nosedive in March.

Economists had expected durable goods orders to plummet by 19.0 percent compared to the 14.4 percent slump originally reported for the previous month.

Excluding a steep drop in orders for transportation equipment, durable goods orders tumbled by 7.4 percent in April after falling by 1.7 percent in March.

A separate report released by the Labor Department on Thursday showed a continued decrease in first-time claims for U.S. unemployment benefits in the week ended May 23rd.

The Labor Department said initial jobless claims dropped to 2.123 million, a decrease of 323,000 from the previous week's revised level of 2.446 million.

Economists had expected jobless claims to fall to 2.100 million from the 2.438 million originally reported for the previous week.

With the decrease, jobless claims pulled back further off the record high of 6.867 million set in the week ended March 28th.

At 10 am ET, the National Association of Realtors is scheduled to release its report on pending home sales in the month of April. Pending home sales are expected to plunge by 15.0 percent.

The Energy Information Administration is due to release its report on oil inventories in the week ended May 22nd at 11 am ET. Crude oil inventories are expected to decrease by 1.9 million barrels.

Also at 11 am ET, New York Federal Reserve Bank President John Williams is scheduled to speak in a moderated discussion at the Stony Brook University College of Business in Stony Brook, New York.

Philadelphia Federal Reserve Bank President Patrick Harker is due to give keynote opening remarks at a conference webinar on "Reinventing Our Communities: Planning for Equity in Recovery - Lessons We're Learning from COVID-19" at 3 pm ET.
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