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Futures for U.S. equity markets pointed to a higher open for stocks on Friday, ending a positive week on Wall Street so far that has been mostly framed by optimism over the prospects of vaccines and treatments for COVID-19 while overshadowing a spike in the viral outbreak inside and outside the U.S.
Markets remain sensitive to talk of the possibility of a fiscal aid package that could help coronavirus-stricken workers and businesses, despite a lack of political momentum to achieve a pact in the aftermath of a contentious U.S. presidential election.
How are stock benchmarks performing?
Futures for the Dow Jones Industrial Average YM00, +0.72% YMZ20, +0.72% were trading 207 points, or 0.7%, to reach 29,199, while S&P 500 index futures ESZ20, +0.68% ES00, +0.68% gained 22.50 points to reach 3,555.25, for a gain of 0.6%. Nasdaq-100 futures NQZ20, +0.59% NQ00, +0.59% climbed 75.75 points, a gain of 0.7%, at 11,896.75.
For the week thus far, the Dow DJIA, -1.08% is up 2.7%, the S&P 500 index SPX, -0.99% is looking at a 0.8% gain, while the Nasdaq Composite Index COMP, -0.65% is on track for a weekly decline of 1.6%, as of Thursday’s close.
What’s driving the stock market?
U.S. stock indexes on Friday the 13th were set to rise despite a number of factors that should otherwise spook investors.
Hope for COVID-19 vaccines has pushed most of the equity benchmarks to a likely second straight weekly gain, but questions remain about the outlook for the market as parts of the world face fresh lockdowns to address a new spread of the virus.
“For all the optimism about the delivery of a successful vaccine, the reality is that the announcement of a possible candidate was never likely to be able to put a stop to what is currently playing out across Europe, as well as the US, in terms of a sharp rise in coronavirus infection rates, hospitalizations, and ultimately, a sharp rise in mortality rates,” wrote Michael Hewson, chief market analyst at CMC Markets UK in a note.
Read: The market is now more vulnerable to bad news, says this strategist. Here’s what he says comes next
The U.S. set a record on Thursday for coronavirus hospitalizations of more than 67,000 as well as a record one-day coronavirus case tally of 163,405. The spread of the pathogen in New York City meant the daily case and positivity rate was 2.6%–and Mayor de Blasio reiterated on Thursday that he would close schools if it hits 3%.
Earlier in the week the promise of an effective Pfizer PFE, -2.46% and BioNTech BNTX, -7.14% vaccine prompted investors to abandon technology stocks that benefit from the stay-at-home trend in favor of value-oriented plays that may benefit from economic recovery, but the latter part of the week has seen a resurgence of bets that have been considered winners during the pandemic.
Federal Reserve Chairman Jerome Powell, during a webcast panel event with central bankers on Thursday, cautioned investors not to overplay reports of vaccines. “From our standpoint, it’s just too soon to assess with any confidence the implications of the news for the path of the economy, especially in the near term,” he said.
“The next few months could be challenging,” Powell said in the event that included European Central Bank President Christine Lagarde and Bank of England Gov. Andrew Bailey.
Meanwhile, the market is growing doubtful that another coronavirus aid package can be crafted soon by Congress, with a gulf remaining between Republicans and Democrats over the breadth and scale of a relief package to help out-of-work Americans and troubled businesses.
Through all the headwinds, many investors remain upbeat based on continued monetary support from the Fed, which promises accommodative policies for the foreseeable future. Investors also seem hopeful that the U.S. and other parts of the world are better prepared for a next wave of coronavirus spread.
Better-than-expected results from the likes of Walt Disney Co. DIS, -1.66% and Cisco Systems CSCO, -1.67% also helped boost the buying mood on Wall Street on Friday. Also, Post-it maker and diversified industrial company 3M Co. MMM, -1.27% said Friday sales rose 3% in October to $2.9 billion.
Investors are still keeping an eye on Joe Biden’s transition to the White House after he has been projected the winner of the 2020 U.S. presidential election against incumbent Donald Trump.
Looking ahead, investors are awaiting a final report on U.S. producer prices due at 8:30 a.m. Eastern. A 10 a.m. report on consumer sentiment from the University of Michigan will be parsed later in the morning.
Which stocks are in focus?
- Cisco Systems Inc. shares surged in premarket after the maker of network services, videoconferencing tools and security software’s quarterly results and outlook topped Wall Street estimates, and it announced a new chief financial officer.
- Disney wrapped up its fiscal year with another quarterly loss, resulting in the entertainment giant’s first annual loss in more than 40 years, but a better-than-expected performance in the quarter pushed shares higher in extended trading Thursday.
- JetBlue Airways Corp. JBLU, -4.96% provided details of its plans to limit onboard capacity for the busy holiday season and its plans to open all of its seats, saying the decision was supported by “science validating the safety of the aircraft cabin.”
- Shares of Li Auto Inc. LI, +27.27% soared 29.3% toward another record Friday, after the China-based electric vehicle maker reported its first quarterly results since going public, in which it reported a wider-than-expected net loss while revenue that beat forecasts, as deliveries continued to rise.
- Shares of Spectrum Brands Holdings Inc. SPB, -0.23% rose in premarket trading Friday, after the home, pet and garden care products company reported fiscal fourth-quarter profit and sales that rose above expectations, citing elevated demand and strong point-of-sale amid a “quick recovery” from COVID-19-related supply disruptions.
