The US stock futures are steady amid hopes over further economic stabilising due to trade talks with China. Bloomberg reported that China seeks to fast-track purchases of American farm goods according to the Phase One trade deal. The country missed its previous target due to the virus-related lockdowns.
Despite that investors’ concerns are rising due to the increasing number of infections in the United States, which is putting pressure on the government to suspend business activities once again.
In addition, the second-quarter earnings season is among the factors that could halt the broader market index bull-run. The majority of companies are likely to post big losses for the second quarter due to lockdowns in April and May. The bears are likely to take advantage of the poor earnings reports. The majority of them have already been saying that the S&P500 index is overvalued.
Scott Wren, Wells Fargo’s senior global market strategist, said: “We believe the market is pricing in quite a bit of good news and the rally is likely to take a breather in coming months as the recovery evolves. We expect volatility in the coming months as we gauge how the re-openings are going and how consumer spending is progressing.”
US jobless claims also topped analysts’ expectations. The jobless claims jumped to 1.5 million last week, up from analysts’ expectations for 1.3 million. However, the claims were down from the previous week’s number of $1.56 million.
Oil prices have also been on a strong momentum due to the prospects of economic recovery. West Texas Intermediate crude oil is trading around $40 while the global benchmark Brent oil is trading well above the $40 level. The rally in oil price is also supported by the supply cut agreement between OPEC and its allies.