Dow, S&P 500 set to break string of losses with producer prices on deck

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MARKET SNAPSHOT

U.S. stocks futures indicated Wall Street is set to buck a string of losses on Friday, as investors weighed up COVID-19 vaccine mandates announced by President Joe Biden to fight the delta variant of coronavirus that some worry is slowing the economic recovery.

Investors are also waiting on an update on producer prices.

How are stock-index futures trading?

  • Dow Jones Industrial Average futures climbed nearly 200 points, or 0.6%, to 34,946
  • S&P 500 futures gained 20 points, or 0.4%, to 4,502
  • Nasdaq-100 futures rose 57 points, or 0.4%, to 15,608

On Thursday, the Dow industrials fell 151.69 points, or 0.4%, to end at 34,879.38, the S&P 500 index  closed down 20.79 points, or 0.5%, to 4,493.28, and the Nasdaq Composite Index  finished at 15,248.25, a loss of 38.38 points, or 0.3%.

The Dow and the S&P 500 have seen four straight days of losses, the longest losing streak for both since June 18, according to Dow Jones Market Data.

What’s driving the market?

Losses for stocks come amid concerns around the continued fallout for global economies from the pandemic, as the delta variant has triggered a resurgence of the virus in the U.S. and across the world in recent months, chiefly among the unvaccinated.

Biden on Thursday announced new vaccine mandates, including a requirement that executive-branch employees as well as federal contractors vaccinate, with no test alternative. He is also discussing a Labor Department rule requiring businesses with 100 or more workers to ensure their employees are vaccinated or show a negative test result weekly or more frequently.

The U.S. is averaging just under 150,000 new cases a day, with 53% of the population fully vaccinated, which is well behind many countries in Europe and also Canada, according to a New York Times tracker.

The focus is on rising COVID cases as markets have tried to parse when the central bank plans to begin tapering its bond-buying purchases. Recent comments by policy makers have suggested to some that the Federal Reserve could announce its tapering plan sooner rather than later. Investors will have to wait until Sept. 21-22 for the next Federal Open Market Committee meeting.

Read: Fed’s Kaplan, Rosengren to sell stocks to avoid perception of conflict of interest

“We expect major central banks to remain supportive of growth, keeping rates lower for longer. This is positive for equity markets, particularly cyclical and value areas of the market,” said Mark Haefele, chief investment officer at UBS Global Wealth Management, to clients in a note on Friday.

The European Central Bank said on Thursday that it would conduct asset purchases under its pandemic emergency purchase program, or PEPP, at a “moderately lower pace” after accelerating purchases in recent quarters.

Friday’s data include August producer prices and revised wholesale inventories for July.

Sentiment also appeared to be getting a lift from geopolitics, with broad gains across Asia after a phone call between Biden and his Chinese counterpart Xi Jinping. “The call lasted 90 minutes with both sides putting their own spin on the call, although the civilized tone seemed to serve as a general boost to risk sentiment overnight,” said Saxo Bank’s chief investment officer, Steen Jakobsen, in a note to clients.

How are other assets trading?

  • The 10-year Treasury note   rose 2 basis points to 1.32%. Yields and debt prices move in opposite directions.
  • The dollar was trading 0.1% lower, as measured by the ICE U.S. Dollar Index   which stood at around 92.34.
  • Gold futures were on the rise, with the December contract  up 0.2% to $1,803 an ounce.
  • Oil futures  rose, with West Texas Intermediate crude up 1.7% at $69.25 a barrel.
  • The Hang Seng  rose 1.9%. Elsewhere in Asia, the Shanghai Composite  closed 0.3% higher and Japan’s Nikkei 225 NIK advanced 1.2%.
  • European equities were mostly higher, with the Stoxx Europe 600  rising 0.6% and the FTSE 100  gaining 0.4%.
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