U.S. Stock Futures Point To A Strong Start
U.S. stock futures are indicating Wall Street will start the week with moderate gains, with all 3 of the major benchmarks in positive territory as retail earnings queue up and with housing data in the offing. As of Monday, 6.01 am ET, the S&P 500, Nasdaq and Dow Jones are up 0.32%, 0.56% and 0.25% respectively, with the S&P 500 reaching record levels again.
U.S.-China Tensions Brewing Again
The six-month trade review between the U.S and China was slated for the weekend, but that didn’t happen. It is not clear why the trade review did not happen. But the recent technology ban might be one of the many reasons. Amongst the notable names that caught in the crosshairs between two largest economies are WeChat, TikTok and Huawei. More Chinese companies are added to the economic blacklists as instructed by the Trump administration. As such, the increasing tensions could become bigger headwinds for stock markets in the coming days. The main concern is that if either the U.S. and/or China resort to a “cold war”, that wouldn’t do good to both economies. And it probably won’t do good for the rest of the world as well.
One of the main highlights in recent weeks, Trump issued an executive order which requires ByteDance to sell or spin off its U.S. TikTok business in 90 days. Trump cited “credible evidence” that ByteDance “might take action that threatens to impair the national security of the United States.”
News of Taiwan agreeing to purchase dozens of F-16 jets from American company Lockheed Martin has also contributed to the rising geopolitical tensions between the U.S. and China. This appears to be the first time such deals have taken place since 1992. Thus, there is no surprise if Beijing is not too pleased about it.
Coronavirus Continues To Be In The News; Gold Futures Edge Higher
Coronavirus cases worldwide have reached 21.82 million. COVID-19 deaths are above 773,000. The COVID-19 death toll in the U.S. has soared more to more than 170,000. And this is only 18 days after the nation marked 150,000 lives lost. This shows that more than 1,000 coronavirus deaths have been reported nearly every day this month. This is with the exception of five days where the number was under the threshold.
Investors typically rush to gold as they grow more worried about a stock market rout. An uptick in coronavirus cases or deaths throughout the U.S. sparked new fears of a longer than expected recession. Weak sentiments, volatile stocks and other asset prices could also prompt investors to buy gold or assets with strong gold exposure for hedging. Warren Buffett’s acquisition of a certain stake in Barrick Gold (GOLD Stock Report) may have surprised some. But it has certainly led investors to look for top gold stocks to buy this week.
Major Retailers Reporting Their Earnings
Retailers are once again among the companies reporting earnings this week. The second-quarter earnings season continues to wind down as the big retailers to report this week include Walmart (WMT Stock Report), Target (TGT Stock Report), Home Depot (HD Stock Report) and Lowe’s (LOW Stock Report). Other notable names that are reporting this week are NVIDIA Corp (NVDA Stock Report), Meituan Dianping (MPNGF Stock Report), and Estee Lauder (EL Stock Report).