Nasdaq hits fresh record as vaccine hopes rise, trade fears deescalate

admin June 23, 2020

Stock extended gains Tuesday morning and the Nasdaq Composite hit a fresh record high as hopes for a coronavirus vaccine rose and U.S.-China trade fears dissipated.

French drugmaker Sanofi (SNY, SNYNF) said on Tuesday that it anticipates it will receive approval for its potential Covid-19 vaccine it is creating with GlaxoSmithKline in the first half of 2021, which if successful would then be available in the second half of next year. While there are currently no vaccines to prevent the coronavirus, a host of pharmaceutical companies have entered the race to try and develop medicines to prevent and treat the virus.

Late Monday evening, stock futures declined sharply but then turned positive after White House trade adviser Peter Navarro said during a Fox News interview that any trade deal with China was “over,” then walked back the remark and clarified that the Phase 1 trade deal “continues in place” in subsequent statements to media.

President Donald Trump added in a Twitter post Monday evening that the China trade deal “is fully intact.”

Global equities slid after Navarro’s earlier interview with Fox News, with Dow futures plunging more than 400 points before recovering. Stock futures had traded little changed to slightly higher earlier in the overnight session.

Big tech stocks outperformed again on Tuesday. Each of Apple, Microsoft, Facebook and Amazon hit record intraday highs. Apple’s stock increase coincided with the company’s annual Worldwide Developers Conference (WWDC), during which the iPhone-maker announced it would be pivoting away from its 15-year partnership with Intel to make its own processors for its Mac devices.

Travel and leisure stocks including airlines and cruise lines fell after coronavirus cases rose further in some geographies, stoking fears that reopening processes would get crimped. California on Tuesday reported its largest one-day increase in virus cases since the start of the pandemic, with cases rising by 5,019 to a total of 183,073. Texas hospitalizations rose by a record based on Monday’s counts, and Governor Greg Abbott said the outbreak was growing at an “unacceptable rate” and warned he would tighten restrictions on social distancing if the outbreak escalates further. Overall cases in Florida rose again Monday to top 100,000.

“This reopening process, it’s pretty important, and we need to see some consumer confidence building because if all of us are sitting in our homes in September or October because we think we’re going to catch the virus, the equity market is not going to like that,” Scott Wren, Wells Fargo Investment Institute senior global equity strategist, told Yahoo Finance’s The Ticker. “We think the bulk of this rally is over for the year. We think we’re going to see a bunch of range trading really between now and the end of the year, finishing a little bit higher than this.”

“To get there and to sustain these kinds of levels you need to see good medical news, you need to see some good economic news too, or at least better than expected economic news,” he added.

Other strategists also anticipated just modest more upside for the S&P 500. Jonathan Golub, Credit Suisse chief equity strategist, on Monday raised his year-end price target for the S&P 500 to 3,200, from the 2,700 the firm saw previously, to represent a 2.6% gain from Monday’s closing prices.

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1:30 p.m. ET: Stocks extend gains, Dow adds 250+ points

Here were the main moves in markets, as of 1:30 p.m. ET:

S&P 500 (^GSPC): +34.47 points (+1.11%) to 3,152.33
Dow (^DJI): +259.39 points (+1.00%) to 26,284.35
Nasdaq (^IXIC): +154.33 points (+1.54%) to 10,211.18
Crude (CL=F): +$0.15 (+0.37%) to $40.88 a barrel
Gold (GC=F): +$15.00 (+0.85%) to $1,781.40 per ounce
10-year Treasury (^TNX): +0.9 bps to yield 0.713%

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11:10 a.m. ET: Nasdaq Composite hits record intraday high as big tech shares surge

The Nasdaq Composite rose by more than 1% to hit a record intraday high of 10,169.14 at 11:10 a.m. ET, after hitting a record close a day earlier. Big tech shares gained, and each of Apple, Microsoft, Facebook and Amazon hit their own record intraday levels.

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10:00 a.m. ET: New home sales surge in May, topping expectations

Sales of new homes jumped by a much better than expected 16.6% in May over April to a seasonally adjusted annual rate of 676,000, the Commerce Department said Tuesday, in another signal of a speedy housing market recovery amid the coronavirus pandemic. Consensus economists had expected new home sales to rise just 2.7% to 640,000.

April’s new home sales were downwardly revised to show a month on month decline of 5.2% to 580,000, from the rise of 0.6% to 623,000 previously reported.

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9:45 a.m. ET: Markit manufacturing, service PMIs show ‘US economic downturn abating markedly in June’

U.S. manufacturing and service sector activity improved from the depths of their contraction earlier this year in June, according to IHS Markit’s preliminary monthly purchasing managers’ indices (PMI). However, the margin of increase was less than consensus economists expected.

The manufacturing PMI rose to 49.6 in June from 37.5 in May, while a print of 50.0 had been expected. Readings below the neutral level of 50 indicate contraction in a sector.

The services PMI increased to 46.7 from 37.5 in May, also short of expectations for 48.0.

“The flash PMI data showed the U.S. economic downturn abating markedly in June. The second quarter started with an alarming rate of collapse but output and jobs are now falling at far more modest rates in both the manufacturing and service sectors,” Chris Williamson, chief business economist at IHS Markit, said in a statement. “The improvement will fuel hopes that the economy can return to growth in the third quarter.”

“However, although brief, the downturn has been fiercer than anything seen previously, leaving a deep scar which will take a long time to heal,” he added. “We anticipate that the US economy will contract by just over 8% in 2020. The coming months will therefore see the focus turn to just how much recovery momentum the economy can muster to recoup this lost output.”

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9:31 a.m. ET: Stocks open higher

Here were the main moves in markets, as of 9:31 a.m. ET:

S&P 500 (^GSPC): +25.05 points (+0.8%) to 3,142.91
Dow (^DJI): +226.69 points (+0.87%) to 26,255.53
Nasdaq (^IXIC): +75.03 points (+0.76%) to 10,132.05
Crude (CL=F): +$0.2 (+0.49%) to $40.93 a barrel
Gold (GC=F): +$11.90 (+0.67%) to $1,778,30 per ounce
10-year Treasury (^TNX): +1.6 bps to yield 0.72%

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7:32 a.m. ET Tuesday: Stock futures rise on vaccine hopes, waning U.S.-China trade fears

Here were the main moves in markets, as of 7:32 a.m. ET Tuesday morning:

S&P 500 futures (ES=F): 3,136.25, up 25.5 points or 0.82%
Dow futures (YM=F): 26,198.00, up 245 points, or 0.94%
Nasdaq futures (NQ=F): 10,196.25, up 71.5 points, or 0.71%

Crude (CL=F): +$0.77 (+1.89%) to $41.50 a barrel
Gold (GC=F): +$3.30 (+0.19%) to $1,769.70 per ounce
10-year Treasury (^TNX): +2.3 bps to yield 0.727%

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10:33 p.m. ET Monday: Stocks turn positive after officials clarify China trade remarks

Here’s where futures were trading as of 10:33 p.m. ET:

S&P 500 futures (ES=F): 3,114.00, up 3.25 points or 0.1%
Dow futures (YM=F): 25,972.00, up 19 points, or 0.07%
Nasdaq futures (NQ=F): 10,123.5, up 1.25 points, or 0.01%

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10:24 p.m. ET: Trump says China trade deal ‘fully intact’

President Donald Trump said in a Twitter post Monday evening that the China trade deal remains “fully intact.”

The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!

— Donald J. Trump (@realDonaldTrump) June 23, 2020

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10:22 p.m. ET: Navarro says China Phase 1 trade deal ‘continues in place,’ according to statement to Bloomberg

White House trade adviser Peter Navarro said in a statement to Bloomberg News Monday evening that his Fox News comments were taken “wildly out of context.”

“They had nothing at all to do with the Phase I trade deal, which continues in place,” Navarro said in the statement, according to Bloomberg. “I was simply speaking to the lack of trust we now have of the Chinese Communist Party after they lied about the origins of the China virus and foisted a pandemic upon the world.”

Dow futures traded off about 0.25%, or 65 points. Nasdaq futures were off about 0.31%, or 31.25 points, and S&P 500 futures were down 0.2%, or 6.25 points.

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10:10 p.m. ET Monday: Stock futures pare losses after Navarro reportedly walks back China trade comments: WSJ

Stock futures pared losses Monday evening after Wall Street Journal reporter Alex Leary wrote in a Twitter post that White House trade adviser Peter Navarro told the outlet his earlier comment on China was not “as it seems.”

Dow futures traded near the flat line, down fewer than 100 points, as of 10:10 p.m. ET. Earlier, Dow futures were off more than 400 points after Navarro’s original comments.

Peter Navarro tells the @WSJ his comment about China trade being “over” not as seems. Says he was trying to make broader point about “trust.” More TK.

— Alex Leary (@learyreports) June 23, 2020

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9:35 p.m. ET Monday: Stock futures futures fall after Navarro says China trade deal is ‘over’

“It’s over,” White House trade adviser Peter Navarro said of the trade deal with China in an interview with Fox News Monday night. Stock futures sold off after the news.

Here were the main moves at the start of the overnight session for U.S. equity futures, as of 9:38 p.m. ET:

S&P 500 futures (ES=F): 3,077.25, down 33.5 points or 1.08%
Dow futures (YM=F): 25,645.00, down 308 points, or 1.19%
Nasdaq futures (NQ=F): 10,022.00, down 102.5 points, or 1.01%

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6:04 p.m. ET Monday: Stock futures edge higher in late trading

Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:04 p.m. ET:

S&P 500 futures (ES=F): 3,114.5, up 3.75 points or 0.12%
Dow futures (YM=F): 25,978.00, up 25 points, or 0.1%
Nasdaq futures (NQ=F): 10,131.5, up 6.75 points, or 0.07%

A trader wears a mask as he works on the floor of the New York Stock Exchange (NYSE) as the building prepares to close indefinitely due to the coronavirus disease (COVID-19) outbreak in New York, U.S., March 20, 2020. REUTERS/Lucas Jackson

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