Finance News

Inventory futures open barely greater as Wall Road tries to increase final week's beneficial properties

Traders work during the opening bell on the New York Stock Exchange (NYSE) on March 5, 2020 on Wall Street in New York City.

Johannes Eisele | AFP | Getty Images

Stock futures rose slightly on Sunday evening as investors tried to build on last week's solid performance.

Dow Jones Industrial Average futures were trading around 45 points, or 0.2%. S&P 500 futures grew by 0.15% along with Nasdaq 100 futures.

The S&P 500 and Dow rose 1.3% and 2.3% last week for their third consecutive weekly advance.

These gains came as investors plunged into beaten value names given the positive news from Moderna vaccine studies and a partnership between Pfizer and BioNTech. ViacomCBS – which fell about 40% over the course of the year – gained almost 10% last week. Gap Inc increased 10.6% and United Airlines 3.8% during this period. The iShares Edge MSCI USA Value Factor ETF (VLUE) also rose 3.5% last week.

However, these advances adversely affected major technology stocks such as Facebook, Amazon, Netflix, Alphabet and Microsoft. Facebook and Alphabet lost more than 1% each last week. Microsoft declined 5.1% over the period, while Amazon and Netflix declined 7.4% and 10.2%, respectively. These declines led to the first weekly loss of the Nasdaq Composite in three weeks. These stocks were the Stalwarts on Wall Street this year as investors bet that these companies' business models can keep them growing during the pandemic.

"All discussions about a rotation from technology to more value-based areas will increase in the coming weeks," said Douglas Busch, founder of ChartSmarter, in a note. "If we lose technology leadership in a meaningful way, I think it will adversely affect the overall market."

"If the sector can just rest and stay in the middle of the field, much like an intelligent jockey who has a lot of horses in a thoroughbred race, there will likely be an increase again in the fall," he added.

The S&P 500 technology sector declined 1.2% last week and was one of only two to decline more than 1% over that period.

Focus on attraction

Traders also turned to Washington when lawmakers started negotiations on new stimulus measures.

Earlier this year, President Donald Trump signed a $ 2 trillion stimulus package that expanded unemployment benefits for those released during the pandemic. These extended benefits included a check for $ 600 a week. However, these additional payments will expire later this month.

"There is a lot of uncertainty about the size and shape of the next bill, especially on the consumer side," said Aneta Markowska, financial economist at Jefferies, in a note.

"We believe the consensus is expecting a package of around $ 1 to $ 1.5, so if the draft is in the upper range of this range, it would be a positive surprise," added Markowska. "Given the deteriorating growth momentum, the Republicans are highly unlikely to under-deliver, which means the risks tend to be high."

Coronavirus cases have increased at an alarming rate. Data compiled by Johns Hopkins University showed that more than 70,000 cases were confirmed on Saturday. These are two consecutive days on which at least 70,000 new infections have been confirmed.

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