Inventory futures rise as merchants monitor enterprise speak
US stock futures rose early Friday as Wall Street weighed the potential for additional fiscal stimulus, as well as earnings and coronavirus news.
The Dow Jones Industrial Average futures rose 90 points, which translates into an opening gain of around 100 points. S&P 500 and Nasdaq 100 futures gained 0.3% and 0.2%, respectively.
Gilead Sciences rose more than 5% in premarket trading after the Food and Drug Administration approved the company’s remdesivir drug for the treatment of coronavirus.
Intel shares fell more than 9% in premarket trading after mixed quarterly results for the chip maker were released. The company’s earnings were in line with analysts ‘expectations, but data center business revenue fell short of analysts’ estimates.
The modest rise in futures came after President Donald Trump and former Vice President Joe Biden attended the closing presidential debate ahead of the November 3 election.
The couple discussed a wide range of topics during the debate, including the coronavirus pandemic, foreign policy and health care. The future, however, remained little changed throughout the debate.
Biden had a head start in most national polls when the possibility of a so-called blue wave increased. Some investors believe that a democratic sweep could cause stock prices to surge in the short term. However, legendary hedge fund manager Paul Tudor Jones warned Thursday that this scenario could put long-term pressure on stocks.
“I think a blue wave and the Biden tax plan will hurt financial assets a lot in the long run,” he said on CNBC’s Squawk Box.
The Dow and S&P 500 gained 0.5% each during regular trading, while the Nasdaq Composite rose 0.2% after House Speaker Nancy Pelosi signaled that she and Treasury Secretary Steven Mnuchin were making progress in their negotiations on fiscal incentives.
“If we didn’t make progress, I wouldn’t spend five seconds in these talks … This is nothing more than a serious attempt. I believe that both sides want to reach an agreement,” said Pelosi.
However, Pelosi also softened expectations that Democrats and Republicans could reach an agreement before the elections, saying it could take “a while” for a bill to be written and signed.
Traders have been keeping an eye on Washington for the past few weeks as they assessed the prospect for enforcement of new coronavirus remedies. Several market experts and economists, including Federal Reserve Chairman Jerome Powell, believe it is imperative that lawmakers reach an agreement on another stimulus package.
“The government is still trying to put together another economic aid package,” said Jim Paulsen, chief investment strategist at The Leuthold Group. “Despite the July end of unemployment benefits under the CARES bill, US economic dynamism is remarkably healthy two and a half months later.”
Paulsen’s comment came after the release of much better-than-expected US unemployment data on Thursday.
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