Stock futures pointed to losses at the open on Monday, extending Friday’s sharp decline.
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The market has rallied furiously from its March low, but the comeback may have run out of steam, according to Stephen Suttmeier, Bank of America’s technical research strategist. The S&P 500’s 12.7% gain in April marked the best month since January 1987, but the equity benchmark has retreated after hitting a key resistance zone of 3,000 to 3,027. “After equities floated like a butterfly with a solid April rally, bearish weekly candles last week… have stung like a bee, increasing the risk for an interim top and corrective phase for US equities entering the seasonally weak month of May,” Suttmeier said. The S&P 500 closed at 2,830.71 on Friday. – Li
Media analyst Michael Nathanson cut his price target on Disney by $8 and downgraded the stock to neutral from buy. He said in a note that others on Wall Street are underestimating how long the economic hit to the entertainment giant will last, with theme parks in particular facing a multi-year recovery. Shares were more than 3% lower in premarket trading. —Pound
Evercore ISI portfolio strategist Dennis DeBusschere wrote Monday that geopolitical tensions between the U. S. and China are beginning to supersede Covid-19 as the market’s main source of angst. Reports that the Trump administration is moving to remove global industrial supply chains from China, and worries that their trade deal could fail, are weighing on commodity cyclicals. Deaths and new Covid-19 case growth, the strategist said, are at their lowest levels in two months across Spain, Italy and Germany, increasing optimism over economic reopening.
“Covid risk [is] being replaced by geopolitical tension,” DeBusschere, who has been tracking the incremental coronavirus developments closely for clients, wrote Monday. “Risk assets are lower on reports the Trump administration is ‘turbocharging’ an initiative to remove global industrial supply chains from China and that the trade deal is falling apart.” — Franck
Phase one of Florida’s reopening begins Monday across the state, apart from in the three hardest-hit counties: Miami-Dade, Broward and Palm Beach. Restaurants and stores can open their doors again – at reduced capacity – and voluntary surgeries can once again be scheduled. People must continue to practice social distancing, however, and bars, gyms and schools remain closed. New Hampshire, Montana, Colorado and Indiana are among the other states that will begin easing restrictions on Monday.
For a state-by-state guide to reopening plans, click here. – Stevens
“Looking at these sales can also provide insights into the mind of one of the greatest investors of all time,” wrote Bill Stone, chief investment officer at Stone Investment Partners. “Buffett was willing to take a loss when the facts changed… Second, the investing process is about probabilities and he observed that a ‘low probability risk ended up happening.
