Stock futures point to a second day of gains, extending September’s selling reprieve

Stock futures rose Wednesday morning, building on the major indices’ gains from Tuesday in an at least temporary reprieve from September’s selloff so far.

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Shares of Dow-component Nike (NKE) climbed more than 12% in early trading, extending advances after the athletic apparel-maker reported quarterly results that far surpassed consensus expectations as a jump in digital sales offset ongoing weakness in foot traffic to physical stores.

Shares of Stitch Fix (SFIX), on the other hand, sank more than 15% overnight, after the digital personal styling service posted a wider than expected quarterly loss. Tesla (TSLA) shares fell 5% overnight following the company’s inaugural “Battery Day” event Tuesday evening, wherein CEO Elon Musk unveiled a new target to slash battery costs in half to be able to produce a cheaper $25,000 electric car by 2023, disappointing some on Wall Street who had hoped for nearer-term developments.

During the regular session Tuesday, tech stocks rebounded to lead the broader market higher, with the S&P 500 rising for the first time in five sessions. The gains in heavily weighted tech names helped offset weakness elsewhere, with the energy and financials sectors still closing out the session lower. The Nasdaq outperformed to climb more than 1.7%, with investors piling back into software names as concerns over the pace of economic recovery in absence of further stimulus took hold.

“The early recoveries in retail sales, industrial production, auto sales and payrolls were indeed broadly V-shaped. But it’s also pretty clear that the rates of recovery have slowed, with only retail sales having completed the V. You can thank the enhanced unemployment benefits for that – $600 per week for more than 30M people, at the peak,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a note Tuesday. He added that home sales have been the only area where the V-shaped recovery has continued, with a report Tuesday showing existing-home sales jumped to the highest level since 2006 in August.

“It’s hard to be optimistic about September and the fourth quarter, with the chance of a further relief bill before the election receding as Washington focuses on the Supreme Court,” he added.

Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin on Tuesday addressed the need for further fiscal stimulus in testimony before the House Financial Services Committee. Powell underscored the limitations of the Federal Reserve’s lending powers, especially in light of the meager appetite among companies to turn to the central bank’s Main Street Lending Program, which has so far extended less than 1% of its loan capacity to small businesses.

“Many borrowers will benefit from these programs, as will the overall economy. But for others, a loan that could be difficult to repay might not be the answer,” Powell said. “And in these cases, direct fiscal support may be needed.”

To that end, Mnuchin said he would support a reauthorization of measures under the Paycheck Protection Program, which would offer forgivable loans to businesses that stayed open and kept most of their workers employed. However, any reallocation of funds would require congressional approval – a factor that remains elusive as lawmakers struggle to come to a consensus on components of another virus relief-related fiscal stimulus package before the presidential election.

Powell and Mnuchin are slated to appear before Congress again on Wednesday, this time before the Select Subcommittee on the Coronavirus Crisis.

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7:12 a.m. ET Wednesday: Stock futures point sharply higher, Dow futures add 200+ points

Here were the main moves in markets, as of 7:12 a.m. ET Wednesday:

• S&P 500 futures (ES=F): 3,315.5, up 16.25 points or 0.49%

• Dow futures (YM=F): 27,367.00, up 224 points or 0.83%

• Nasdaq futures (NQ=F): 11,181.25, up 31.75 points, or 0.28%

• Crude (CL=F): +$0.12 (+0.3%) to $39.92 a barrel

• Gold (GC=F): -$11.60 (-0.61%) to $1,896.00 per ounce

• 10-year Treasury (^TNX): +1.3 bps to yield 0.679%

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6:04 p.m. ET Tuesday: Stock futures open slightly higher

Here were the main moves in equity markets, as of 6:04 p.m. ET Monday:

• S&P 500 futures (ES=F): 3,300.5, up 1.25 points or 0.04%

• Dow futures (YM=F): 27,0207.00, up 64 points or 0.24%

• Nasdaq futures (NQ=F): 11,149.75, up 0.25 points, or 0.00%

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NEW YORK, NEW YORK – MARCH 18: Traders work on the floor of the New York Stock Exchange (NYSE) on March 18, 2020 in New York City. The Dow fell more than 1,200 points today as COVID-19 fears continue to roil world markets. (Photo by Spencer Platt/Getty Images)

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