S&P 500: Futures use earnings reports to combat broad risk-off above 3,250

  • S&P 500 Futures recede upside momentum around 3,273.
  • Upbeat earnings from tech giants helped buyers begin the Friday on a positive note.
  • Virus woes, doubts over US fiscal package join recently downbeat American data to favor the risk-off mood.
  • Chicago PMI, Michigan Consumer Sentiment Index could offer near-term direction.

S&P 500 Futures ease from the early-Asian highs near 3,273 to 3,260 during the initial hour of Tokyo open on Friday. The risk barometer previously cheered upbeat earnings from the global technology companies. However, the latest concerning the coronavirus (COVID-19), US fiscal package and Presidential election question the earlier risk-on mood.

Shares of Amazon, Apple and Facebook rose the previous day on Wall Street after the second quarter (Q2) earnings from the big tech companies pleased traders and helped Nasdaq to differ from the rest. The tech-concentrated index marked 0.43% gained against 0.85% and -0.38% figures by Dow Jones and S&P 500 by Thursday’s closing.

Even so, markets remain pessimistic as figures from Texas and China’s Xinjiang keeps telling that the worst is yet to come from the virus. While Texas marked the record death toll of 322 on Thursday, China’s Xinjiang flashes 112 new cases with Mainland China’s 127 numbers.

Elsewhere, US policymakers are nowhere close to the much-awaited fiscal plans. On Thursday’s Senate, Republican Leader Mitch McConnell cited hopes of an announcement on the unemployment claim benefits and the deal by the weekend. However, the recent updates from the White House Chief of Staff Mark Meadow defy any such chances even if Treasury Secretary Steve Mnuchin is optimistic.

Additionally, US President Donald Trump pushed to postpones the November month’s Presidential elections, while citing mail-in ballots, but couldn’t gain any accolades. Furthermore, the Sino-American tussle and the US dollar index (DXY) plunge to the fresh low since May 2018 also favors the risk aversion wave.

As a result, the US 10-year Treasury yields revisit the lowest since March, also the record bottom near 0.536% whereas stocks in Asia-Pacific also print losses.

Traders may now wait for China’s official PMI data for immediate direction whereas qualitative risk catalysts could keep the driver’s seat ahead of the second-tier activity and consumer sentiment data from the US.

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