U.S. Stock Futures Edge Higher Following Last Week’s Rally
U.S. stock futures climbed on Sunday evening, indicating the possible extension of Wall Street’s rally last week. The long strings of the rally since March carried the Nasdaq and S&P 500 to record highs. Dow Jones has also reversed all its losses incurred from the coronavirus pandemic. All the major U.S. major benchmarks are on the green as we start the new week. The Dow, S&P 500 and Nasdaq futures were up 0.18%, 0.26% and 0.36% respectively as of 6.07 am ET.
The encouraging developments of COVID-19 programmes, be it vaccines, treatments or testing kits have given market reasons for hope. In addition, July’s high frequency economic data broadly outperformed Wall Street’s estimates. The latest of which are the robust personal income and spending data released on Friday. All of the recent data are pointing to an “even boomier” third quarter than prior estimates, JP Morgan Chase said on Friday.
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Apple and Tesla Stock Splits Happening Today
Investors are also keeping close eyes on this month’s high-flying tech stocks of Apple (AAPL Stock Report) and Tesla (TSLA Stock Report), whose stocks will split today after reaching record-high levels. No doubt, tech stocks have been pushing the stock market higher. They are no doubt led by the big cap FAANG stocks. As a result, the major indices also raced higher with their growing compositions in their respective indices.
The world’s largest tech company begins trading after a 4-for-1 split at $125.5 per share while the largest EV company starts trading on a 5-for-1 stock split at $443.4 per share. A strong performance of AAPL stock and TSLA stock today could potentially act as a catalyst for another tech rally this week. But if that doesn’t happen, investors shouldn’t be surprised. After all, considering their outperformance prior to the stock splits, it’s normal if these hot tech stocks take a breather.
Gold Price Flirting Around The $1,950 Level
The gold market is starting the new trading week on the back foot as the U.S. dollar continues to find new buyers. Gold prices have been hovering around the $1,950 level. Pressure comes after it was unable to stay at $2,000 or higher an ounce earlier this month. This has brought a lot of volatility to the gold space, be it gold stocks or gold ETFs. The gold price seems to be holding steady in recent weeks and that’s great news for gold investors. After all, if we are expecting an uptrend in the medium term, a healthy consolidation would be inevitable. When the correction is over, the fundamentals that ignited gold’s rally should continue to support prices.
U.S. Unemployment Report In Focus
This week will be another crucial week to see how the U.S. economy has been recovering amid the uneven reopening of the economy. Despite government efforts to resuscitate the economy, the aid provided has yet to restore the economy to the pre-pandemic levels. With unemployment levels still at an alarming rate, the payroll data will be closely watched for signs of the labor market is healing, and also whether laid-off workers will be able to find employment.
Recall that the U.S. unemployment spiked to 22.1 million in March and April, noted Marc Chandler at Bannockburn Global Forex. “In the three months through July, about 9.28 million workers returned, or about 42%” of those thrown out of work. “With a little bit of luck, the unemployment rate can slip back below 10%, the peak in the Great Financial Crisis,” he said. But he warned that “some estimates that around a quarter of the overall job loss may be permanent. That still leaves scope for gradual improvement in the coming months.”
Corporate Earnings Continues To Watch This Week
Believe it or not, corporate earnings have been key drivers of the stock market recently. Major indices have rallied sharply since the beginning of the earnings season, and it appears to be showing no signs of stopping. And that’s because the heavyweights of each indices have mostly reported their earnings. While this week’s earnings aren’t going to affect the indices meaningfully because of their trifling size, the tech and growth heavy slate does give the market another test. Amongst those reporting earnings this week are Zoom Video Technologies (ZM Stock Report), CrowdStrike Holdings (CRWD Stock Report), MongoDB (MDB Stock Report), DocuSign (DOCU Stock Report), and Broadcom (AVGO Stock Report).