US pre-open: Futures point to losses ahead of first day of Q3 trading
By Iain Gilbert
Date: Wednesday 01 Jul 2020
(Sharecast News) - US futures had stocks opening lower on the first day of trading in the new quarter.
As of 1220 BST, Dow futures were down 1.04%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.77% and 0.57% softer, respectively.
The Dow closed 217.08 points higher on Tuesday as what had been a volatile but record-setting month for Wall Street came to a close.
The focus will mostly be on Covid-19 headlines on Wednesday, with White House health advisor Dr Anthony Fauci cautioning that if the pandemic continues at its current rate, new cases could potentially surpass 100,000 infections every day.
As many as 12 US states have now halted or decelerated their economic reopening as a result of a 40% jump in new cases over the past seven days to roughly 39,750 every 24 hours.
IG's Joshua Mahony said: "While traders have largely targeted US shares given the expectation of huge stimulus measures from Trump and Powell, we are now likely to see European markets outperform as a united front on financial support bolsters the impressive virus response seen over recent months."
In macro news, the recent surge in mortgage demand from homebuyers over the past two months looked to be waning, according to data released by the Mortgage Bankers Association on Wednesday, despite mortgage rates continuing to drop.
Mortgage applications to purchase a home fell for a second straight week, down 1% week-on-week, while purchase volume was 15% year-on-year.
"The weakening in activity is potentially a signal that pent-up demand is starting to wane and that low housing supply is limiting prospective buyers' options," said MBA economist Joel Kan.
Still to come, challenger job cuts data for June will be posted at 1230 BST, while ADP employment figures will follow at 1315 BST, IHS Markit's June final manufacturing PMI and construction spending figures for May will be posted at 1500 BST.
Later in the day, minutes from the Federal Open Markets Committee meeting will be published at 1900 BST.
On the corporate front, FedEx shares were up in pre-market trading after topping earnings and revenue forecasts, while retailer Macy's will report earnings before the open.
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