A pedestrian will pass in front of the New York Stock Exchange (NYSE) in New York, USA, on June 3, 2020.
Michael Nagle | Bloomberg | Getty Images
Stock futures rose on Sunday night trading as Florida investors saw a record surge in coronavirus cases.
Futures on the Dow Jones Industrial Average rose 65 points, indicating a 90 point gain when opened on Monday. The S&P 500 futures and the Nasdaq 100 futures rose 0.2% and 0.4%, respectively.
Florida reported 15,299 new coronavirus cases on Sunday, the highest total number of individual days since the pandemic started in a US state. Meanwhile, the United States has reported more than 60,000 new cases a day for three days in a row, which, according to Johns Hopkins University, results in a national total of more than 3 million cases.
"COVID remains a major problem with cases, hospitalization and deaths," said Adam Crisafulli, founder of Vital Knowledge, in a note on Sunday. "The market continues to receive all of this information relatively well, and this appears to be a function of vaccine hopes, lower death rates compared to March / April, avoiding wholesale locks, and the lack of a resurgence in the northeast (especially in New York) ). "
The Dow and S & P 500 posted two consecutive weeks of earnings, while resilience in technology stocks brought the Nasdaq to a new record after three positive weeks. In July, the Dow and S & P 500 rose 1.0% and 2.7%, respectively. Tech-heavy Nasdaq outperformed 10.7% this month as Amazon, Apple, Netflix and Alphabet hit new highs.
"The overall rally is still very tight … and some of the soaring mega-cap stocks are being overbought (and overvalued)," said Matthew Maley, chief market strategist at Miller Tobacco, in a note on Sunday. "Therefore, we HAVE to wait to see if the key S&P resistance level has actually broken up before we can confirm that another rally leg has started on the broad stock market."
The winning season starts this week with major banks and others reporting their quarterly results. JPMorgan, Citigroup and Wells Fargo are expected to report on Tuesday. Pepsi will report earnings on Monday before the market opens.
Corporate earnings are expected to decrease 44% in the second quarter. This would be the largest drop in quarterly earnings since the fourth quarter of 2008, according to Refinitiv. However, the market could shake off the sharp drop in earnings as long as companies signal a recovery on the horizon.
After the best quarter of the S&P 500 in more than 20 years, the comeback rally of the broad market has slowed amid fears of a worsening pandemic. Nevertheless, the stock benchmark has only fallen by 1.4% since the beginning of the year, which is around 6% below its February record.
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