Market Analysis

Beyond the Numbers

Futures Pointing To Roughly Flat Open On Wall Street
11/20/2020 8:57 AM

The major U.S. index futures are currently pointing to a roughly flat open on Friday following the volatility seen over the past few sessions.

Traders may stick to the sidelines early in the day, as stocks have turned in a lackluster performance for much of the past two sessions before showing significant moves late in the trading day.

Mixed developments regarding the coronavirus pandemic may also keep trading activity subdued, as traders digest upbeat news on the vaccine front along with a continued spike in new cases.

Pfizer (PFE) and BioNTech (BNTX) have announced they will submit a request today to the FDA for Emergency Use Authorization of their coronavirus vaccine candidate.

“Filing in the U.S. represents a critical milestone in our journey to deliver a COVID-19 vaccine to the world and we now have a more complete picture of both the efficacy and safety profile of our vaccine, giving us confidence in its potential,” said Dr. Albert Bourla, Pfizer Chairman and CEO.

Meanwhile, the continued surge in new cases, hospitalizations and deaths in the U.S. has raised concerns new restrictions and lockdowns will dampen the economy recovery.

A lack of major U.S. economic data may also keep some traders from make significant moves following the slew of reports released over the past few days.

In a reversal of the performance seen on Wednesday, stocks moved higher late in the trading day on Thursday after turning in a lackluster performance for much of the session. The major averages all moved to the upside, with the tech-heavy Nasdaq outperforming its counterparts.

The major averages finished the session near their best levels of the day. The Nasdaq advanced 103.11 points or 0.9 percent to 11,904.71, while the Dow edged up 44.81 points or 0.2 percent to 29,483.23 and the S&P 500 rose 14.08 points or 0.4 percent to 3,581.87.

The notable advance by the Nasdaq seemed to reflect expectations that new lockdowns as a result of the recent spike in coronavirus cases will benefit technology companies, as was seen earlier in the pandemic.

Data from John Hopkins University showed 170,161 new coronavirus cases in the U.S. on Wednesday, the second-highest daily total, while daily deaths reached a new high of 1,848.

The recent surge in coronavirus cases has led several states to impose new restrictions and lockdowns, potentially leading the more Americans once again relying on technology as they work from home.

The markets also seemed to receive a boost from comments from Senate Minority Leader Chuck Schumer, D-N.Y., indicating Senate Majority Leader Mitch McConnell, R-Ken., has agreed to resume negotiations over a new stimulus bull.

"Last night, they've agreed to sit down and the staffs are going to sit down today or tomorrow to try to begin to see if we can get a real good Covid relief bill," Schumer said during a press conference.

He added, "So there's been a little bit of a breakthrough in that McConnell's folks are finally sitting down and talking to us."

The choppy trading seen earlier in the day came as traders digested a mixed batch of U.S. economic data, with separate reports showing an unexpected increase in initial jobless claims and an unexpected spike in existing home sales.

A report from the Labor Department said jobless claims climbed to 742,000 in the week ended November 14th, an increase of 31,000 from the previous week's revised level of 711,000.

The rebound came as a surprise to economists, who had expected jobless claims to edge down to 707,000 from the 709,000 originally reported for the previous week.

In the previous week, jobless claims fell to their lowest level since hitting 282,000 in the week ended March 14th.

"The risk may be for a further rise in claims as coronavirus cases surge and some states impose restrictions on activity," said Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics.

Meanwhile, a separate report from the National Association of Realtors said existing home sales jumped by 4.3 percent to an annual rate of 6.85 million in October after soaring by 9.9 percent to a revised rate of 6.57 million in September.

The sharp increase came as a surprise to economists, who had expected existing home sales to slump by 1.4 percent to a rate of 6.45 million from the 6.54 million originally reported for the previous month.

With the unexpected spike, existing home sales reached their highest level since February of 2006. Existing home sales were up by 26.6 percent compared to the same month a year ago.

"Considering that we remain in a period of stubbornly high unemployment relative to pre-pandemic levels, the housing sector has performed remarkably well this year," said Lawrence Yun, NAR's chief economist.

Oil service stocks moved sharply higher over the course of the session, driving the Philadelphia Oil Service Index up by 3.4 percent. With the jump, the index reached a three-month closing high. The rally by oil service stocks came despite a modest decrease by the price of crude oil.

Significant strength also emerged among airline stocks, as reflected by the 1.8 percent gain posted by the NYSE Arca Airline Index. The index ended the session at its best closing level in well over eight months.

Natural gas, semiconductor and software stocks also saw considerable strength on the day, while some weakness remained visible among tobacco and utilities.

Commodity, Currency Markets

Crude oil futures are rising $0.24 to $41.98 a barrel after edging down $0.08 to $41.74 a barrel on Thursday. Meanwhile, after sliding $12.40 to $1,861.50 an ounce in the previous session, gold futures are climbing $4.70 to $1,866.20 an ounce.

On the currency front, the U.S. dollar is trading at 103.81 yen versus the 103.74 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.1867 compared to yesterday’s $1.1875.


Asian stocks ended mixed on Friday as investors assessed recent gains in the context of surging coronavirus cases and fresh restrictions in the United States.

Traders also remained focused on the latest developments concerning a public spat between the U.S. Treasury and Federal Reserve over emergency lending facilities and the resumption of U.S. fiscal aid talks.

Chinese shares advanced on hopes for a broader economic recovery. The benchmark Shanghai Composite Index rose 14.64 points, or 0.4 percent, to 3,377.73, while Hong Kong's Hang Seng Index ended up 94.57 points, or 0.4 percent, at 26,451.54.

Japanese shares ended lower for a third consecutive session as record daily covid-19 cases fueled concerns that officials will place new restrictions on business activity.

The Tokyo Metropolitan Government raised its virus alert status to its fourth and highest level after daily coronavirus cases in Japan hit another record high on Thursday.

Data showing that the manufacturing sector in Japan continued to contract in November also dampened sentiment.

The Nikkei 225 Index fell 106.97 points, or 0.4 percent, to 25,527.37, while the broader Topix closed marginally higher at 1,727.39.

Central Japan Railway, Tokio Marine, Fast Retailing, Daikin Industries, Sompo Holdings, T&D and MS&AD Group lost 2-4 percent, while Sumco, Rakuten and Isuzu Motors rose 3-5 percent.

Air conditioner maker Daikin gave up 2.6 percent on a Nikkei report that electric vehicle maker Tesla was considering making air conditioners for homes.

Hitachi Metals surged almost 10 percent. The Nikkei reported that its parent Hitachi Ltd. had begun accepting bids for the metals company.

Australian markets fluctuated before ending slightly lower as new U.S. coronavirus infections topped 170,000 for the second time, deaths crossed 250,000 and hospitalizations set a new record for the ninth day in a row.

The benchmark S&P/ASX 200 Index slipped 8 points, or 0.1 percent, to 6,539.20, while the broader All Ordinaries Index ended down 2.80 points at 6,739.90.

QBE Insurance shed 0.9 percent after insurers lost a test case trying to knock out claims for business interruptions caused by the coronavirus pandemic.

Insurance Australia Group shares entered a trading halt as the company examines the financial impacts of the ruling and its capital requirements.

Aged-care home operator Regis Healthcare jumped more than 23 percent after rejecting a $555 million takeover bid from conglomerate Washington H. Soul Pattinson.

Regenerative medicine company Mesoblast surged 11.3 percent after it entered into an exclusive license and collaboration agreement with Swedish drug maker Novartis to manufacture and commercialize its lead drug candidate.

In economic news, the Australian Bureau of Statistics said that the total value of retail sales in Australia climbed a seasonally adjusted 1.6 percent sequentially in October, coming in at A$29.618 billion. That beat expectations for an increase of 0.3 percent following the 1.1 percent decline in September.

Seoul stocks rose for the third straight session as foreign investors extended their buying streak despite rising coronavirus cases at home and abroad and renewed lockdowns in several countries. The benchmark Kospi edged up 6.08 points, or 0.2 percent, to 2,553.50, the highest level since February 1, 2018.

In South Korea, the daily caseload stayed above 300 for the third consecutive day, prompting authorities to warn of a return to touch measures to fight a third wave of mass infection.


European stocks have moved higher on Friday as increased hopes around vaccines offset concerns over rising Covid-19 cases.

European Commission President Ursula von der Leyen stated that COVID-19 vaccines could be approved before the end of the year. Data from the mid-stage trial of AstraZeneca PLC and Oxford University's coronavirus vaccine candidate produced a strong immune response in older adults.

Meanwhile, the World Health Organization has warned against using popular Covid-19 drug remdesivir, developed by Gilead Sciences, to treat hospitalized patients. According to the agency, there is currently no evidence that remdesivir improves survival and other outcomes in these patients.

Ahead of the upcoming G20 leaders' virtual meeting this week, the International Monetary Fund says the economic path ahead remains difficult and prone to setbacks.

In the U.K., economic data showed Britain's retail sales rose more than expected in October despite a resurgence in COVID-19 cases. Health minister Matt Hancock said that coronavirus cases in Britain are starting to flatten as a result of current lockdowns.

Currently, the U.K.’s FTSE 100 Index, the German DAX Index and the French CAC 40 Index are all climbing by 0.4 percent.

SNP Schneider-Neureither & Partner SE has risen percent after it decided to appoint Michael Eberhardt as chief executive officer, effective December 1, 2020.

In U.K., AstraZeneca shares have moved higher after the company reported positive covid vaccine development news. Further, Imfinzi (durvalumab) has been approved in the US for an additional dosing option, a 1,500mg fixed dose every four weeks, in the approved indications of unresectable Stage III non-small cell lung cancer.

Technology company Sage Group Plc's shares have tumbled after the company reported weak revenues in its fiscal 2020, despite higher profit. The company also raised its dividend and said it sees higher organic revenue growth in the next year.

In Switzerland, Swiss Re stock has edged higher after the insurance major confirmed its over-the-cycle financial targets. The company reiterated its capital management priorities, focusing on capitalization and a stable or increasing dividend.

U.S. Economic Reports

Richmond Federal Reserve President Thomas Barkin and Atlanta Fed President Raphael Bostic are due to speak at a Chamber RVA “Shared Values Summit Session #4: Regional Leadership on Economic Mobility and Inclusive Growth” virtual event at 9 am ET.

At 9:30 am ET, Dallas Federal Reserve President Robert Kaplan is scheduled to speak in a moderated Q&A at the “Energy and the Economy: Navigating the Changing Energy Landscape” virtual event.

Stocks In Focus

Shares of FireEye (FEYE) are moving sharply higher in pre-market trading after the cybersecurity company announced a $400 million strategic investment by Blackstone (BX) and ClearSky.

Housewares retailer Williams-Sonoma (WSM) is also seeing significant pre-market strength after reporting third quarter results that exceeded analyst estimates on both the top and bottom lines.

Foot Locker (FL) may also move to the upside after the sportswear and footwear retailer reported better than expected third quarter results.

On the day, shares of Workday (WDAY) may come under pressure after the cloud-software company reported third quarter results that beat estimates but warned about the lingering effects of the pandemic.
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