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U.S. stock-index futures were headed higher on Tuesday as investors awaited the start of a busy corporate earnings reporting week, which includes quarterly results from Coca-Cola, Lockheed Martin, Synchrony Financial, and United Airlines.
Market sentiment was upbeat after positive results from International Business Machines late-Monday and after the European Union forged a historic fiscal package, intended to dampen the economic impact of the effects of the COVID-19 pandemic.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average YM00, +0.61% , YMU20, +0.61% were up 178 points, or 0.7%, at 26,811; those for the S&P 500 index ES00, +0.70% , ESU20, +0.70% were gaining 23.55 points, or 0.7%, at 3,268.75; while Nasdaq-100 futures NQ00, +0.77% NQU20, +0.77% advanced 97.75 points, or 0.9%, at 11,048.75.
On Monday, the Dow DJIA, +0.03% added 8.92 points, or less than 0.1%, to finish at 26,680.87. The S&P 500 SPX, +0.84% rose 27.11 points, or 0.8%, to end at 3,251.84. and ending the session positive for 2020. The Nasdaq Composite COMP, +2.51% surged 263.90 points, or 2.5%, to end at a record 10,767.09, booking its largest daily percent gain since April 29, according to Dow Jones Market Data. Monday’s all-time closing peak for the Nasdaq also represented its 28th of 2020.
What’s driving the market?
Appetite for equities, and in particular technology companies, looked undiminished after the tech-laden Nasdaq Composite delivered its 28th record close of 2020 on Monday, with investors responding to quarterly results and guidance that have so far been better-than-feared despite the impact of the coronavirus pandemic.
Setting the stage for optimism early Tuesday was news that the EU agreed a €750 billion ($860 billion) coronavirus rescue fund after four days of intense negotiations among officials from the 27-nation bloc. The recovery package comprises €390 billion in grants and the remainder in loans as a part of a compromise for nation’s, Denmark, Sweden, Austria and the Netherlands, who had been reluctant to push for a larger package of funds via grants. The leaders also agreed on a multiyear EU budget of over €1 trillion that will run from next year to 2027.
In the U.S., investors were awaiting developments on another fiscal stimulus plan by Congress as a $600 per-week federal unemployment package is set to expire at the end of the month. U.S. Senate Majority Leader Mitch McConnell and Treasury Secretary Steven Mnuchin were slated to discuss details for additional aid to Americans at the White House on Tuesday. Mnuchin has suggested that $1 trillion would represent a minimum amount in recovery funds, with Democrats supporting a package that exceeds $3 trillion.
The reports come as a number of corporations are reporting including Coca-Cola Co. KO, -1.49% which presented results that were better than expected early Tuesday.
The action on Wall Street comes as the global tally for confirmed cases of the coronavirus that causes COVID-19 climbed to 14.7 million on Tuesday, according to data aggregated by Johns Hopkins University, and the death toll rose to 610,292. The U.S. recorded just under 60,000 new infections on Monday, and 531 deaths, according to a New York Times tracker, which is up 64% on a 14-day basis. In total, the U.S. now has 3.83 million confirmed cases, or about a quarter of the global total, and 140,909 deaths.
Looking ahead, investors will watch the Chicago Fed National Activity Index for June at 8:30 a.m.
Meanwhile, market participants may watch the Senate hearing at 2 p.m. ET for controversial Federal Reserve nomination pick Judith Shelton. Shelton, who was an informal Trump adviser during his presidential campaign, has been a longtime advocate for tying the dollar’s value to gold. The committee will also vote on a second Trump Fed nominee, Christopher Waller, the director of research at the St. Louis Fed., who is expected to be confirmed easily.
Which stocks are in focus?
- Shares of Coca-Cola Inc. rose in premarket trading Tuesday, after the beverage and snack giant reported a second-quarter profit to topped expectations but revenue that fell a bit shy, amid challenges resulting from the coronavirus pandemic
- International Business Machines IBM, +1.00% shares gained in after-hours trading Monday, after the tech giant reported another decline in revenue but produced more profit and sales than Wall Street expected amid the COVID-19 pandemic.
- Investors are also awaiting results from Synchrony Financial SYF, -3.57% and Lockheed Martin Corp. LMT, -0.80% and United Airlines parent United Airlines Holdings Inc. UAL, -4.68%
- Tapestry Inc. TPR, -3.95%, parent of the Coach, Stuart Weitzman and Kate Spade brands, said Chief Executive Jide Zeitlin is resigning from his role and from the board for personal reasons. The company named Chief Financial Officer Joanne Crevoiserat as interim CEO.
