US Stock Futures Find It Hard To Gain A Strong Foothold
Dow Jones futures fell slightly Sunday night, while S&P 500 futures were flat and Nasdaq futures rose modestly. But as of Monday, 6.31 am E.T., Dow Jones was up 0.11%, while the S&P 500 and Nasdaq Composite indexes rose 0.26% and 0.74% respectively. The reason that these stock futures were trading a little soft could be because the U.S is likely to announce stricter measures against Chinese companies. The delays to a fresh tranche of fiscal support could also be a reason for lower confidence in the pace of the economic recovery.
Microsoft Confirms TikTok Deals
U.S-China tensions could still be a major headwind for the stock market in the coming days. Microsoft (MSFT Stock Report) said it held talks to buy the U.S. operations of TikTok. This came as President Trump is looking to ban the popular China-owned video social media site due to security reasons. Confirming talks between CEO Satya Nadella and President Trump, Microsoft said Sunday it is prepared to continue discussions to purchase TikTok’s U.S. operations until Sept. 15.
“Microsoft fully appreciates the importance of addressing the President’s concerns,” the company said in a statement. “It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury.”
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Earnings Winding Down
Earnings for major technology companies have seen them crushing analysts’ estimates. Recall that we saw strong reports from Apple, Amazon, Facebook, and Google last week. As we continue to wind down the earnings season, there are still some big names reporting their results this week. These include Disney (DIS Stock Report), Square (SQ Stock Report), and Activision Blizzard (ATVI Stock Report). There are also other notable names reporting this week including Roku (ROKU Stock Report), Wayfair (W Stock Report), and The New York Times (NYT Stock Report).
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Major Central Bank Decisions
Four more central banks are announcing interest rate decisions this week after the Fed did so last week. These include Australia’s central bank on Tuesday, followed by Brazil’s on Wednesday. On Thursday, the UK’s and India’s central banks will be announcing rates. Given the importance of these economies, analysts will be monitoring the decisions of these central banks closely.
Many will be looking forward to the release of the July unemployment rate this Friday. This will serve as a reality check. Economists are expecting a slight decline to 10.3%. This will be released together with a range of data from the Bureau of Labor Statistics on the U.S. labor market. The relatively small estimated drop in unemployment is not suggesting a quick recovery of the job market. That’s in line with the trend in the weekly initial unemployment claims. Also on Friday, the nonfarm payrolls shall provide additional insights on the impact of the ongoing crisis on different sectors of the economy.