Stock Futures Pare Gains After Powell Comments

The Fed Chair warned the U.S. is facing "significant downside risks" with COVID-19

Assistant Editor
May 13, 2020 at 9:29 AM
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Dow Jones Industrial Average (DJI) futures are sitting right around fair value this morning, giving back sizable gains in the wake of some jarring headlines. First, the U.S. producer price index (PPI) tumbled by a larger-than-anticipated amount for April. But the real pivot came from Fed Chair Jerome Powell in a webcast event, remarking that the U.S. is facing "significant downside risks" as it combats the coronavirus outbreak. Powell went on to say the path to economic recovery is "uncertain," and that more fiscal policy will be needed to pull the U.S. out of the downturn.

The cautionary remarks come not even 24 hours after the National Institute of Allergy and Infectious Diseases Director Dr. Anthony Fauci warned of a second coronavirus wave. Meanwhile, futures on the S&P 500 Index (SPX) are signaling a lower move, while tech names are propping up the Nasdaq-100 Index (NDX).

Continue reading for more on today's market, including: 

  • Schaeffer's Senior Quantitative Analyst Rocky White asks: What should we make of Fibonacci retracements after rallies?
  • PNC stock slipped after the company sold its stake in BlackRock.
  • Plus, China stock upgraded; Gilead Sciences strikes up new deals; and Walt Disney sells a significant sum of notes. 

Stock Futures Chart May 13

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw 1.6 million call contracts traded on Tuesday, and 960,889 put contracts. The single-session equity put/call ratio jumped to 0.60, and the 21-day moving average remained at 0.61.
  2. The shares of JD.Com Inc (NASDAQ:JD) are up 2.5% in electronic trading, after Mizuho issued an upgrade on the e-commerce giant to "buy" from "neutral." While also upping its price target to $58 from $37, the analyst in coverage waxed optimistic about the deregulation of pharmacy sales and the demand for essential items. JD was up 33% year-to-date going into today.
  3. Gilead Sciences, Inc. (NASDAQ:GILD) agreed to licensing deals with five generic drug makers -- the largest of which is Mylan NV (MYL) -- for production of its potential antiviral COVID-19 treatment remdesivir in 127 countries outside of the U.S. GILD is up 2% in pre-market trading, set to add to its 20% year-to-date tally.
  4. After filing to sell $11 billion in notes of various terms and due dates ranging from 2026 to 2060, Walt Disney Co (NYSE:DIS) is up 0.7% before the open. The entertainment blue-chip is down 28% in 2020, and recently ceded a key metric to Netflix (NFLX).
  5. Alibaba, Cisco Systems (CSCO), Dillard's (DDS), and SmileDirectClub (SDC) will step into the earnings confessional.

Buzz Chart May 13

European Markets Stumble; U.K. GDP Disappoints 

Asian markets were mixed today, with investors paying close attention to the reopening economies and resurgence of coronavirus cases. Among the winners, the Kospi in South Korea had the best day, with a 1% gain, while China’s Shanghai Composite added 0.2%. Meanwhile, Japan’s Nikkei lost 0.5%, and Hong Kong’s Hang Seng dropped 0.3%. 

Stocks in Europe are lower today, as fears over a second wave of coronavirus weigh. London’s FTSE 100 is down 0.8% at last check, after preliminary studies showed that the U.K.’s gross domestic product (GDP) contracted by 5.8% in March, the steepest monthly decline on record. Elsewhere, the French CAC is down 1.6%, and the DAX in Germany has dipped 1.4%. 

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