U.S. Stock Futures Drop as Protests Grow; Yen Up: Markets Wrap

U.S. stock futures fell as investors weighed the violent protests in some American cities that have stoked concerns about a reacceleration in infection rates and a damper on the economic recovery.

The yen and gold edged up. S&P 500 futures opened lower. With Amazon scaling back deliveries and Apple closing some stores Sunday, investors are gauging how violence over the weekend will affect the reopening of the world’s largest economy. Crude oil fell. China’s markets will be taking in President Donald Trump’s latest barrage of China criticism, which stopped short of tough sanctions over Hong Kong.

Traders on Monday will also take stock of a slew of manufacturing PMIs due, including from South Korea and Taiwan, after Chinese data over the weekend showed a continued bumpy recovery. The demonstrations in the U.S. could add another layer of complexity after a two-month rally in global equities from March lows.

“The reopening could be disrupted and that can affect local state economies that just began to emerge from the pandemic,” said Ben Emons, managing director for global macro strategy at Medley Global Advisors.

Here are some key events coming up:

  • Australia’s central bank is expected to keep its main policy programs unchanged on Tuesday. So too is the case for Canada, which has options to add stimulus but will probably stand pat on Wednesday to allow more time to evaluate the progress of policy action.
  • In Europe, the ECB is expected to top up its rescue program with an additional 500 billion euros of asset purchases. Anything less than an expansion at Thursday’s meeting would be a big shock, Bloomberg Economics said.
  • The U.S. labor market report on Friday will probably show American unemployment soared to 19.6% in May, the highest since the 1930s.

These are the main moves in markets:

Stocks

  • Futures on the S&P 500 Index declined 0.8% as of 7:04 a.m. in Tokyo. The index climbed 0.5% on Friday.
  • Futures on Japan’s Nikkei 225 rose 1.1% on Friday, when Hang Seng futures advanced 0.6%. Futures on Australia’s S&P/ASX 200 Index slid 0.4%.

Currencies

  • The yen rose 0.1% to 107.69 per dollar.
  • The euro bought $1.1119, up 0.2%.
  • The offshore yuan was steady at 7.1361 per dollar.
  • The Australian dollar slid 0.1% to 66.58 U.S. cents.

Bonds

  • The yield on 10-year Treasuries fell four basis points to 0.65% on Friday.

Commodities

  • West Texas Intermediate crude fell 1.7% to $34.90 a barrel.
  • Gold rose 0.3% to $1,736.52.

— With assistance by Sophie Caronello

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