Futures Rise Amid Plans to Ease Lockdown
U.S. stock index futures gained on Monday as more states looked set to lift the coronavirus-induced lockdowns. Investors of stocks awaited earnings reports from marquee companies including Apple and Microsoft due this week.
A late-session rally for tech companies had helped Wall Street end higher on Friday. With sentiment also getting a boost as Georgia was the first state to ease restrictions. This was despite disapproval from President Donald Trump and health experts.
Trillions of dollars in stimulus have helped the S&P 500 futures recover nearly 30% from March lows. With the economic damage only growing, more gains may be limited unless there is progress on treatments for the disease.
White House economic adviser Kevin Hassett said the U.S. jobless rate could hit 16 percent or more in April. Against that, many more U.S. states were looking forward to reopening businesses and futures were expected to rise.
Boeing Co gained 1.6% in premarket stock trading after it pulled out of a $4.2 billion deal. That was to buy Brazil plane maker Embraer’s commercial jets division over the weekend.
Craig Erlam, an analyst at OANDA in London said what they are now seeing is very promising. States in the U.S and countries across Europe are at least starting to plan for the lifting of restrictions.
Futures Expectations
The Bank of Japan is weighing in with more stimulus, as the focus this week will be on the Federal Reserve’s meeting. Although there is a low expectation for more easing by the U.S. central bank.
Futures rose with Dow e-minis up 219 points, or 0.93% and S&P 500 e-minis up 26 points, or 0.92%. Moreover, Nasdaq 100 e-minis were up 109.25 points, or 1.25%.
Around 173 companies in the S&P 500 are scheduled to report quarterly earnings this week. These include Apple, Amazon.com, Microsoft, Boeing, Ford, General Electric, and Chevron.
Overall, analysts expect a drop of nearly 15% in S&P 500 companies’ first-quarter earnings. Profits for the energy sector slumped around 68%.
Apple gave up some early gains after a report said it was delaying the production ramp-up of its flagship iPhones. It is coming later this year by about a month.
Meanwhile, in other stock market news, Regeneron Pharmaceuticals Inc slipped 0.2%. This was after the U.S. drug maker and France’s Sanofi SA said they would continue a late-stage trial of Kevzara. The arthritis drug to be tried in only COVID-19 patients who are critical. Trial for those in the severe group is to be discontinued.
