S&P 500: Futures dwindle above 3,150 amid quiet markets

  • S&P 500 Futures fade upside momentum below 3,170, repeats the on and off moves since Friday.
  • Virus figures from the US continue to come out as worrisome, data from Tokyo, Beijing suggest immediate relief.
  • The Sino-American tussle continues with US Secretary of State Mike Pompeo recently on the driver’s seat.
  • China inflation, US Jobless Claims could offer intermediate moves but major attention will be on the virus/geopolitical updates.

S&P 500 Futures remain pressured while taking rounds to 3,165 during the initial hour of Tokyo open on Thursday. The US equity derivative recently took a U-turn from 3,170 while repeating its five-day alternate pattern of making a loss after printing a positive day. The risk barometer’s latest moves could be traced to the surge in the coronavirus (COVID-19) in the US in contrast to the rest of the world. Also suggesting pessimism for the world’s largest economy is the record budget deficit and tension with China. However, the market has been quiet amid a lack of major data/events ahead of the June monthly inflation data from Beijing and weekly US Jobless Claims.

The Texas Health Department suggests new cases rise by 9,979 to 220,564 on Wednesday while marking the biggest daily increase since pandemic started. On a broader scale, the US pandemic numbers surged past-3.0 million with the recent official figures suggesting a hike of 59,655 on Wednesday. It should also be noted that a top US health official, Dr. Anthony Fauci, director of the US National Institute of Allergy and Infectious Diseases has already poured cold water on expectations of any relief from the virus.

On the contrary, figures from Tokyo suggest only 75 new cases on Wednesday, the first below-100 reading in seven days. Further, Beijing keeps flashing zero cases for the third day in a row whereas Victoria also marked a lesser hike in the COVID-19 numbers.

Mainly due to this virus woes, the US government’s budget deficit has risen by the record high of $2.7 trillion during the first nine months of the fiscal year. Even so, St. Louis Federal Reserve President James Bullard remains optimistic while expecting a below 8.0% unemployment rate by the end of the year.

Elsewhere, US diplomat Pompeo embarks upon China’s human rights violation after announcing visa restrictions for Beijing’s diplomats. The Trump administration member is also joining others to discuss undermining the Hong Kong dollar peg. Though, the dragon nation remains firm and establishes a new security office in Hong Kong.

Amid all these catalysts, the US 10-year Treasury yields extend the previous day’s gains above 0.66% while stocks in Japan and Australia print mild gains by the press time.

Looking forward, anticipated recovery in China’s June month Consumer Price Index (CPI) and Producer Price Index (PPI) might offer intermediate direction to the US equity gauge. However, any disappointment from the US Jobless Claims could extend the losses.

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