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Futures pointed to a higher start for U.S. stocks Friday, but benchmark indexes remained on track for small weekly declines as investors tracked long-running talks for another round of coronavirus aid in Congress.
What are major benchmarks doing?
Futures on the Dow Jones Industrial Average YM00, +0.34% rose 74 points, or 0.3%, to 28,342, while S&P 500 futures ES00, +0.34% gained 10.55 points, or 0.3%, to trade at 3,459.75. Nasdaq-100 futures NQ00, +0.27% were up 34 points, or 0.3%, at 11,683.75.
The Dow DJIA, +0.54% on Thursday rose 152.84 points, or 0.5%, to close at 28,363.66, while the S&P 500 SPX, +0.52% gained 17.93 points, or 0.5%, to finish at 3,453.49. The Nasdaq Composite COMP, +0.18% ended at 11,506.01, up 21.31 points, or 0.2%. Through Thursday, the S&P 500 and Dow were each down 0.9% for the week, while the Nasdaq was off 1.4%.
What’s driving the market?
Investors continue to focus on talks between House Democrats and the Trump administration on a new round of relief spending. House Speaker Nancy Pelosi, D-Calif., on Thursday said negotiations with Treasury Secretary Steven Mnuchin were “almost there” in terms of resolving some of the thornier areas of disagreement, but it still appeared doubtful that Senate Republicans would back a large spending plan of around $2 trillion. Senate Majority Leader Mitch McConnell, R-Ky., on Thursday refused to commit to a pre-election vote on an aid package.
“What is clear…is that even if an agreement is reached in the next day or two, it could take a while for the bill to be drafted and then voted on — something that Pelosi herself has indicated — so it’s looking less and less likely that a new stimulus package will be passed before the election,” said Raffi Boyadjian, senior investment analyst at XM, in a note.
Market participants, however, “appear unfazed by the prospect of a delay and have been steadily pricing in such a scenario,” he said. “As long as the two sides keep talking and the size of the package stays close to $2 trillion, risk assets should remain supported.”
A second and final debate between Democratic challenger Joe Biden and President Donald Trump on Thursday night appeared to have little effect on the markets. Biden continues to lead Trump in the polls, but has seen his advantage narrow somewhat.
Read: Trump, Biden attack each other over virus, stock market and economy in final debate
“The market’s verdict on the U.S. debate is that it doesn’t alter the outlook significantly and, as such, doesn’t justify a collapse in risk sentiment or anything more serious,” said Kit Juckes, macro strategist at Société Générale, in a note.
Positive news on the COVID-19 treatment front might also provide some support. The Food and Drug Administration on Thursday approved Gilead Sciences Inc.’s GILD, +0.76% Veklury for patients who had been hospitalized with COVID-19. the drug, until now called remdesivir, is the first COVID-19 therapy to receive full FDA approval during the pandemic though the World Health Organization says the drug has a limited effect on patients chances of survival. Gilead shares were up 4.6% in premarket trade.
The U.S. economic calendar is light, featuring the Markit purchasing managers index readings for the manufacturing and services sectors at 9:45 a.m. Eastern.
Which companies are in focus?
- Shares of Intel Corp. INTC, +0.74% were down nearly 10% in premarket trade after the company late Thursday said revenue sank more than expected in the third quarter as sales of server chips suffered.
- American Express Co. AXP, +3.31% shares were lower in premarket trade after the credit card and travel services company reported a third-quarter profit that disappointed compared with expectations, while revenue topped forecasts.
What are other markets doing?
The yield on the 10-year Treasury note TMUBMUSD10Y, 0.866% rose 1.7 basis points to 0.862%. Yields and bond prices move in opposite directions.
In global equities, the Shanghai Composite SHCOMP, -1.04% fell 1%, while Hong Kong’s Hang Seng Index HSI, +0.53% rose 0.5% and Japan’s Nikkei 225 NIK, +0.18% gained 0.2%. European stocks were ending the week on a strong note, with the Stoxx 600 Europe Index SXXP, +0.99% up 0.9%, while London’s FTSE 100 UKX, +1.54% jumped 1.6%.
Oil futures edged higher, with the U.S. crude benchmark CL.1, +0.27% up 0.3% at $40.73 a barrel on the New York Mercantile Exchange. Gold futures GOLD, -1.75% traded modestly higher, turning positive for the week.
The ICE U.S. Dollar Index DXY, -0.22%, a measure of the currency against a basket of six major rivals, was down 0.2%.
