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Stock futures slip to kick off June
31 May 2020

Wall Street opened with futures dropping to kick off the month after consecutive monthly gains.

Dow Jones Industrial Average futures traded 0.15% lower. S&P 500 and Nasdaq 100 futures slid 0.2% each.

As heading into the new month, traders focused on the reopening of economies after the coronavirus pandemic forced nonessential businesses to close. The reopening is happening along with widespread mass protests across the U.S. over police brutality.

Meanwhile, China’s legislature has passed national security law in Hong Kong. However, there was no unraveling of the US-China phase-one trade deal signed.

The S&P 500 and Dow each gained at least 3% last week while the Nasdaq Composite advanced 1.8% to close out May.

Stock Futures

Last week’s gains led the major averages to their first back-to-back monthly advances since late 2019. The Dow and S&P 500 gained 4.3% and 4.5%, respectively, for May while the Nasdaq Composite advanced 6.8%.

That advance also put the S&P 500 up 38% from its intraday low set on March 23.

Global strategist at BCA Research pointed out that the second wave of the disease will be the main downside risk of stocks return. And if fears of a new outbreak were to escalate, risk assets would suffer.

However, strategist recommends a “modest overweight” portfolio allocation to stocks, reminding people that even if a vaccine does not become available later this year, increased testing should allow for a more economically palatable approach to containment strategies.


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