US markets lift in final hour, ASX futures point to bounce back

By Simon Herrmann. Published at Jun 26, 2020, in Market Wrap

After a steep sell-off on Thursday, ASX futures lifted ahead of trading as US stocks finished higher in a choppy session.

All three major US indices – the Dow, the S&P 500 and the Nasdaq – hovered around the flatline for most of the day but finished in the black as buying intensified in the last hour of trading.

Bank stocks propelled the market higher ahead of the annual stress test, somewhat offsetting concerns of the rising number of coronavirus cases in the US (and in many other countries around the world) amid easing lockdown restrictions.

The Dow Jones Industrial Average rose 299.7 points, or 1.18%, to 25,745.6, the S&P 500 gained 33.4 points, or 1.10%, to 3,083.76. The tech heavy Nasdaq Composite, which outperformed most global markets, added 107.8 points, or 1.09%, to close 10,017.00.

On Thursday, the ASX 200 fell 2.48% after a weak lead from international markets. Following a substantial recovery – which left many analysts scratching their heads – investors pulled out of the market as the corona crisis appears to be far from over.

However, as a result of overnight activity ASX futures traded 70 points higher at 8am (AEDT) pointing to a bounce today.

Nike Inc posts US$790 million loss for quarter

As companies disclose their financial results, the impact of the pandemic is becoming increasingly obvious.

On Thursday, Nike Inc. reported a loss for the fourth quarter. The world’s largest footwear company had to shut stores for weeks due to lockdowns spurred by the COVID-19 pandemic.

While online sales rose 75%, the company’s wholesale business, through which it sells merchandise to department stores and footwear retailers, saw a 50% fall in product shipments in the quarter. Net loss came in at US$790 million, or 51 cents per share, compared with a profit of US$989 million a year earlier. Nike’s shares closed down 3.5%.

European markets advance, commodities broadly higher

US markets eked out a gain regardless as the S&P500 bank index rose over 3%. This could provide a strong lead for Australian banks today which continue to trade well below their 12-month highs.

European stocks traded broadly higher as well, with Frankfurt, Paris and London rising in unison. The DAX added 0.69% to 12,177.9 points, the CAC 40 rose 0.97% to 4,918.6 points and the FTSE 100 lifted 0.38% to 6,147.1 points.

Gold prices firmed overnight with the precious metal trading 0.24% higher at US$1,774.8 per ounce. Oil prices advanced approximately 1%.

Despite Thursday’s bounce none of the issues that caused volatility over the past week are resolved yet. Investors seem to be betting on a bright future but there is a fine line between investing and gambling, in particular as global markets have seen a huge influx of new traders during lockdown.

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