US pre-open: Futures point to losses following strong rally in previous session
By Iain Gilbert
Date: Tuesday 07 Jul 2020
(Sharecast News) - Wall Street futures had stocks opening lower on Tuesday following the strong rally seen during the previous session.
As of 1235 BST, Dow Jones futures were down 1.23%, while S&P 500 and Nasdaq-100 futures had the indices opening 1.09% and 0.94% softer, respectively.
The Dow closed 459.67 points higher on Monday as major indices shook off concerns around a continued rise in new Covid-19 cases across the United States.
However, while investors were seemingly able to shake off those fears yesterday, concerns around the global economic outlook as a result of the pandemic were weighing on sentiment ahead of the bell on Tuesday after the Organisation for Economic Cooperation and Development stated unemployment would reach its highest level since the Great Depression - and may not return to pre-outbreak levels until 2022.
A general sense of dread coming into second-quarter earnings season also seemed to be impacting sentiment.
Oanda's Craig Erlam said: "with reopening comes risk as many states in the US are now seeing. Second wave anxiety is putting a downer on the economic enthusiasm that accompanied the lifting of restrictions around the world and its left investors caught in two minds about the great stock market recovery.
"Should these targeted lockdowns prove successful, there will still be economic consequences but not nearly to the same degree as we experienced in the second quarter. Nationwide lockdowns are now unlikely and the better the track and trace systems become, the more targeted and speedy the restrictions will become. This may mean the anxiety we're seeing passes, although in the near-term the US remains a major concern."
On the macro front, the government's Job Openings and Labor Turnover Survey will be released at 1500 BST.
Federal Reserve Bank of Atlanta president Raphael Bostic will deliver a speech at 1400 BST, while Randal Quarles will speak at 1800 BST and Richmond Fed head Thomas Barkin and San Francisco president Mary Daly will speak at 1900 BST.
In the corporate space, Amazon shares hit $3,000 each for the first time on Monday but were lower in pre-market trading, while Novavax shares surged 45% before the bell after the White House awarded the pharma group a $1.6bn contract to develop a Covid-19 vaccine.
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