U.S. pre-open: Futures point to modest gains despite civil unrest

Marco Green
June 2, 2020

"The protests are part of the reason for the sell-off in the dollar over the last four or five days", said CMC Markets senior analyst Michael Hewson.

Wall Street stocks dipped in early trading Monday as markets digested a weekend of civil rights protest across the United States as the country reopened from coronavirus shutdowns.

The Dow Jones Industrial Average gained 91.91 points to 25,475.02, while the S&P 500 rose 11.42 points to 3,055.73 and the Nasdaq Composite Index advanced 62.18 points to 9,552.05. S. stock exchanges for potential unfair financial practices. (PFE) and General Electric Co.

While futures briefly fell after Donald Trump threatened to deploy the U.S. military to silence protesters if states and cities failed to do so, investors seemingly shrugged off their concerns shortly thereafter and continued to focus on the reopening of the nation's economy.

Heightened tensions between Washington and Beijing were also in focus as China requested state-owned companies to cease purchases of soybeans and pork from the USA after the President said the White House would seek to revoke Hong Kong's favoured trade status due to a new security law passed by the Chinese parliament.

"Equity markets continue to display remarkable resilience in the face of a constant barrage of troubling developments, with investors continuing to focus on the positive signs of reopening", said Mark Hackett, chief of investment research at Nationwide.

On the economic front, investors embraced signs of steadying manufacturing activity as the Institute for Supply Management's manufacturing index for May rose to a reading of 43.1 from 41.5 in April.

The Commerce Department said that USA construction spending fell 2.9% in April, after a flat reading in March.

Data from surveys of purchasing manufacturers indicated that factories in the US and overseas continued to reduce output last month, but the pace of deterioration slowed as governments eased coronavirus-related restrictions.

"The hope is that what we've seen with China is playing out in Europe, and there will eventually be follow-through in the USA once the virus is under containment", said Jeffrey Kleintop, chief global investment strategist at Charles Schwab. "When you think... we're beginning to take U.S. We've seen this all before, going back to the civil protests in the 1960s", said Ian Shepherdson, chief economist at Pantheon Macroeconomics. However, many on Wall Street grew anxious that rising risks of the racial strife and U.S. "If fears of a new outbreak were to escalate, risk assets would suffer".

In Europe markets finished mixed, as Britain's FTSE-100 rose 1.48%, France's CAC-40 gained 1.43% and Germany's DAX dropped 1.65%. China's Shanghai Composite gained 2.21%, Hong Kong's Hang Seng jumped 3.36% and Japan's Nikkei-225 rose 0.84%. Gold futures edged down 0.06%. The Dow rose about 90 points on Monday after a 4.2% gain in May and a 11% rally in April.

In bond markets, the yield on the 10-year U.S. Treasury ticked up to 0.671%, from 0.650% Friday.

Other reports by Click Lancashire

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