Stocks – U.S. Futures Lower; ISM, ADP Employment Data Eyed

This post was originally published on this site – U.S. stocks are set to open lower Wednesday, consolidating after strong gains Tuesday closed out Wall Street’s best quarter in more than two decades. Volumes could be light given scheduled key economic data and amid caution given the resurgence of Covid-19 cases in many states. 

At 7 AM ET (1100 GMT), S&P 500 Futurestraded 22 points, or 0.7%, lower, Nasdaq Futures down 57 points, or 0.6%. The Dow Futures contract fell 266 points, or 1%. 

The three cash indices all posted their third straight positive month in June, rebounding after the sharp losses in the March. TheDow Jones Industrial Average recorded its best quarter since the first quarter of 1987, the S&P 500 the best quarter since the fourth quarter of 1998 and the Nasdaq Composite since the fourth quarter of 1999.

Helping the stock markets push higher has been an extraordinary injection of monetary and fiscal stimulus from both the Federal Reserve and the Trump administration.

In testimony before the House Financial Services Committee Tuesday, Fed Chairman Jerome Powell and Treasury Secretary Steven Mnuchin expressed willingness to provide support for as long as necessary.

In fact the Senate late Tuesday voted to extend the deadline for businesses to apply for coronavirus aid under the Paycheck Protection Program until August.

However, Powell also warned that a second wave of the coronavirus outbreak could “force government and force people to withdraw again from economic activity” … and “undermine public confidence, which is what we need to get back to lots of economic activity.”  

This is particularly relevant as the U.S. reported more than 47,000 new cases of the coronavirus on Tuesday – the biggest one-day spike since the start of the pandemic, This has prompted populous states like California, Texas and Florida to restrict economic activity once more.

Payrolls processor ADP will release its monthly report on hiring in the U.S. economy at 8:15 AM ET, with analysts expecting the economy to have created three million jobs. The ISM manufacturing index is due out at 10 AM ET, and is also expected to rebound sharply. Finally, the minutes from the latest FOMC meeting are due at 2 PM ET.

In corporate news, FedEx (NYSE:FDX) will be in the spotlight after posting strong gains post session after the deliveries and logistics company strong fiscal fourth quarter numbers, helped by a surge in online buying amid the coronavirus pandemic.

Additionally, Constellation Brands (NYSE:STZ) and General Mills (NYSE:GIS) are both due to release earnings ahead of the bell.

Oil prices pushed higher Wednesday, helped by American Petroleum Institute data showing a larger-than-expected reduction in U.S. crude inventories last week.

U.S. government inventory numbers are due out at 10:30 AM ET, and are expected to show a draw of 710,000 barrels. 

At 7:05 AM ET, crude oil Crude Oil WTI Futures traded 1.6% higher at $39.91 a barrel. The international benchmark Brent contract rose 1.4% to $41.86.

Elsewhere, gold futures fell 0.3% to $1,795.45/oz, while EUR/USD traded at 1.1196, 0.3% lower.

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