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US Stock Futures Mildly Lower, European Stocks Hover at Records

Equity futures point to a lower open. Stoxx 600 Europe jumped to a new intraday record in the initial hours of Tuesday’s trading.

SageFX - Aug, 10, 21

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Principal Points

  • Stoxx 600 Europe jumped to a new intraday record in the initial hours of Tuesday’s trading
  • Equity futures on Tuesday point to a lower open, European stock continues moving higher

Equity futures on Wall Street were little changed in pre-market action on Tuesday. The fairly flat and to the downside move before the opening bell followed a rather uneventful trading session on Monday that saw major averages slide from their record highs.

Dow Jones Industrial Average on Monday slipped by 106.66 points, or 0.30%, to 35,101.85. The S&P500 edged lower by roughly 0.1%, finishing the session at 4,432.35. The Nasdaq Composite rose 0.16%, to 14,860.18.

As oil prices dropped about 4%, stocks in the energy sector were among the worst performers during yesterday’s session. Fears re-emerged that the Delta strain of the coronavirus could lead to an economic slowdown, particularly to lower oil demand. The latest Covid-19 data from the Centers for Disease Control showed that the US reported over 230,000 new cases for August 9, the higher number since early January when the US was at the peak of the pandemic.

Still, economists expect consumer spending will remain robust as the labor market continues to expand. The July employment report, which showed US employers have added 943,000 new hirings, confirmed the economic growth is solid

Upside Trading for European Stocks

Overseas, European stocks opened Tuesday’s trading to the upside after another record high set Monday. The pan-continental Stoxx 600 Europe yesterday pushed slightly to the upside by adding 0.15%, enough to cement a fresh closing record of 470.68. On Tuesday, in the early hours of the session, the broad-based index jumped by roughly 1.5 points, setting a new intraday record above 472.00.

Major indexes in Europe ended Monday action mixed as investors reassessed the latest developments over the coronavirus pandemic and slipping commodity and oil prices. UK’s FTSE100 was the only winning performer among individual-economy indexes. Spain’s IBEX35, France’s CAC40, and Germany’s DAX were in the red, lower between 0.06% to 0.15%.

Technology stocks in Europe gained about 0.5%, while oil mainstays Royal Dutch Shell and BP slipped around 1% each, dragged lower by the falling oil prices.

In cryptocurrency action, bitcoin, ether, and other major digital assets resumed their upside swing on Monday. Powered by optimistic expectations and brighter prospects for the fledgling crypto market, bitcoin added over 3.6%, or nearly $1,600, to end the session at $45,400. The Ethereum token was also lifted by investors’ confidence as it jumped roughly 3% to a closing price of $3,068.

Cryptocurrencies have been in a solid rally in recent weeks as the regulatory crackdown from China has dissipated and Chinese miners have relocated to other areas that accommodate crypto mining.

As the US Senate is set to pass a $1tn infrastructure package in a bipartisan vote, a lingering cryptocurrency tax provision is dividing lawmakers. While the vote is expected as soon as today, the Portman-Warner

amendment is being debated. The amendment is looking to tax proof of stake validators, but not proof of work mining, thus causing a great divide between cryptocurrency projects.

Crypto circles have strongly opposed the legislation and have been increasingly vocal about it. Even Tesla CEO Elon Musk commented on Twitter “this is not the time to pick technology winners or losers in cryptocurrency technology.” He concluded by saying: “There is no crisis that compels hasty legislation.”