Futures contracts inched higher in the overnight session on Sunday evening, implying that when daily trading resumes in New York, the major U.S. stock indices will trade at or near all-time highs. Dow futures rose 98 points, while S&P 500 futures rose 0.25 percent. Futures on the Nasdaq 100 index were up 0.23 percent.
Last week’s trading ended on a positive note, with both the Dow Jones Industrial Average and the S&P 500 reaching new all-time highs on Friday. The Dow gained 2.7 percent last week, while the S&P 500 gained 1.2 percent. Despite a 0.9 percent gain in the final session of the week, the Nasdaq Composite lost 1.5 percent in the same time frame.
Despite a weaker-than-expected April employment study, which showed that U.S. employers added 266,000 net payrolls last month, late-week optimism prevailed. Dow Jones interviewed economists, who predicted a million new jobs. Due to declining Covid-19 cases, Morgan Stanley’s chief U.S. equity strategist Mike Wilson noted that markets seem to have already priced in a vigorous economic reopening.
Any news that threatens the narrative may have an immediate effect on how money is allocated by fund managers. Wilson wrote, “We’re watching expectations vs reality with the market now well priced for reopening. On a cumulative basis, retail sales are above where they would have been on pre-COVID trends – suggesting some expectations risk around the pent up demand narrative.”
Over the weekend, a ransomware attack forced the shutdown of the country’s largest fuel pipeline. Colonial Pipeline, which has a 5,500-mile system, said it had to suspend fuel transport from the Gulf Coast to the New York metro area on Friday because it had to take some systems offline to deal with the hazard.
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