US Equity Futures Flat After a Monday Rally
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- Advancements for US Tech Companies
- Parties go back to the negotiating table to discuss the stimulus package
US stocks climbed significantly in yesterday’s session led by tech stocks. The strong rally ended with the DJIA up 0.88% or 250 points, the S&P is up 1.64% or 57.09 points and the Nasdaq Composite is up 2.56% or 296 points. The reasons behind the rally were elevated expectations for an agreement on a fiscal stimulus intended to lift the market and provide stability amid the destructive effect of the pandemic on the economy and the upcoming corporate earnings season.
All major tech companies ticked higher led by Apple, up 6.4%, which is expected to unveil the new 5G iPhone today. Twitter climbed 5.10% to 48.25. Amazon advanced 4.8% ahead of today’s sales event, Prime Day.
Surprising or not, another factor for the market’s rise is the election polls data which shows a significant lead for former vice-president Joe Biden. This indicates that investors feel comfortable with a possible Presidential change. Three weeks before the election, former vice-president Biden has a convincing 10 percentage point lead over the Republican candidate and current US President Donald Trump.
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Negotiations Still on the Table for Stimulus Package
As far as the stimulus package is concerned, both parties still have to build bridges to reach an agreement. The Republicans rejected the proposal of a $1.8T cash injection and now need to return to the negotiating table just three weeks before the election. Even more so, they do not seem to be inclined towards a deal as they have informed the House of Representatives not to expect any advancement towards an agreement this week.
Futures today point to a relatively flat open, with the DJIA and the S&P500 slightly in the red in the premarket, while the Nasdaq points to a higher open, up 0.74% or 90 points, after its strongest day since Sep 9.
The market is also trying to factor in the upcoming corporate earnings season with key events coming up. Large US banks such as JPMorgan Chase, Bank of America, Goldman Sachs, and Citigroup are set to report earnings this week. Before the opening bell today, BlackRock and Johnson & Johnson are scheduled to report quarterly earnings.