US Futures Mixed, European Markets Jump to Record High

04 Aug 2021 · 3rd Party Analysis

US Futures Mixed, European Markets Jump to Record High

WRITTEN BY ThorFX

In Summary

  • Futures trading sees major averages relatively flat on Wednesday
  • Stoxx 600 Europe surges to a fresh intraday record, major bourses in Europe are all in the green

Stock futures are little changed ahead of the opening bell in New York on Wednesday. A day after the S&P500 rose to a new record close, S&P500 futures are floating right under the flatline, essentially unchanged in pre-market trading. Dow Jones Industrial Average futures were lower by about 40 points, while Nasdaq Composite futures traded in mildly positive territory.

A strong earnings season continues to bolster investors’ expectations the rally in stocks will grind higher. Companies like Under Armour, Ralph Lauren, Lyft, and Caesars Entertainment reported yesterday stronger-than-expected earnings results for the second quarter. Citing robust growth for the quarter ended June, the companies forecasted their upward momentum to carry on in the next half of 2021.

Earnings season continues Wednesday with General Motors reporting before the bell. Travel and leisure stocks, including MGM Resorts, Wynn Resorts, and Booking Holdings, are set to deliver quarterly statements after the bell.

In the regular session on Tuesday, the main benchmark indexes swung to the upside. The blue-chip 30-stock Dow Jones added nearly 280 points, or 0.80%, to 35,116.40. The broad-based S&P500 surged to a fresh record as it gained nearly 36 points and closed the session at 4,423.15. The tech-focused Nasdaq Composite advanced 80 points, or 0.55%, to finish Tuesday trading at 14,761.29.

Covid Pandemic Remains Strong in the US

Gains in the major stock averages on Tuesday arrived relatively late in the session. Throughout the initial hours, stocks slumped across the board as the 10-year Treasury yield fell to 1.15% in the previous day. The decline in stocks and bond yields was largely attributed to fears that the rapid spread of the Delta variant of coronavirus could undermine the ongoing economic expansion.

On the Covid-19 front, the global economic recovery is once more threatened by a sharp rise of Delta virus cases spanning from Asia to the West. In the Chinese city of Wuhan where Covid-19 was first discovered, authorities on Monday reported the first new case in more than a year. As the virus is now in more than 14 Chinese provinces and spreading quickly across Asia, concerns of an economic slowdown have emerged.

In the US, the pandemic appears to maintain its footprint. Accelerating cases have sent the daily number of confirmed infections on Tuesday, August 3, to nearly 150,000. In contrast, a month ago on July 3, the US had reported less than 4,000 new cases or an increase by 3650% in one month.

Overseas, European markets on Wednesday are trading strongly in positive territory. The pan-continental Stoxx 600 jumped to a fresh all-time session high in the initial hours of trading. The region-wide benchmark approached the 470 level earlier and later retreated to the area around 468 points, up about 0.50% on the day.

Major European bourses are looking optimistic with the German DAX leading the pack, up about 0.70%. Others, including France’s CAC40 and UK’s FTSE100, are up between 0.30% and 0.50%.

Cryptocurrency trading appears to stagnate today as little action is barely causing major digital assets to move. Bitcoin and ether are gyrating near unchanged levels. The leading crypto token is floating right under the $38,000-mark, while the Ethereum token is moving sideways around $2,500 per coin.

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