BY MEDHA SINGH AND DEVIK JAIN
Wall Street’s main indexes were set to open higher on Friday as investors bet on more official stimulus to drive a post-pandemic economic revival, even as COVID-19 cases saw another record rise at home.
BlackRock Inc, the world’s largest asset manager, rose 1.8% in premarket trading after reporting a jump in quarterly profit as investors poured money into its fixed-income funds and cash management services.
As the second-quarter earnings season gets underway, investors are looking for clues on the path of recovery for Corporate America. Unprecedented stimulus measures and improving economic data have helped the S&P 500 rise to within 5% of its February record high.
Investors are also hoping for more fiscal support, as a program that offers additional unemployment benefits is set to expire on July 31. The U.S. Congress will return to Washington on Monday to battle over the next coronavirus aid bill.
“It’s going to be very messy over the next couple of weeks, as Republicans and Democrats go back and forth. I suspect they’re going to end up settling somewhere closer to maybe one and a half to two trillion in fiscal stimulus,” said David Bahnsen, chief investment officer, the Bahnsen Group, based in Newport Beach, California
At 8:21 a.m. ET, Dow e-minis were up 157 points, or 0.59%. S&P 500 e-minis were up 21.5 points, or 0.67% and Nasdaq 100 e-minis were up 115.75 points, or 1.1%.
The S&P 500 and the Dow have risen so far this week after promising data on a COVID-19 vaccine helped investors look past a record-breaking increase in coronavirus cases in the United States.
The Nasdaq, in contrast, is down about 1.4% since last Friday’s record closing high as investors rotated out of technology stocks and moved into cyclical sectors.
“These tech stocks are grossly overvalued and the inevitable rollover of big tech into more value-oriented sectors is in the very early innings. I expect a very rough patch for big tech for the rest of the year,” said Bahnsen.
Netflix Inc shed 8.3% after it forecast its subscriber growth during the coronavirus pandemic would slow even more than Wall Street expected during the third quarter.
United Airlines rose 0.9% as it said it has reached an agreement with its pilots’ union on two different packages aimed at reducing involuntary furloughs in the fall and keeping pilots at the ready once coronavirus-hit demand starts to pick up.