(Bloomberg) — U.S. stock futures are pointing to a rebound in the S&P 500 Index after concerns over coronavirus infections and tougher lockdowns Wednesday spurred the gauge’s worst decline in more than four months.
S&P 500 contracts expiring in December jumped 1.4% as of 6:30 a.m. in London. Contracts on the Nasdaq 100 and Dow Jones Industrial Average also rose about 1.4% each. The underlying S&P gauge slumped 3.5% on Wednesday, the biggest drop since June 11, amid a surge in Covid-19 hospitalizations, especially in the Midwest.
“There’s a degree of short covering and opportunistic buying after the big selloff,” said Ilya Spivak, head Asia Pacific strategist at DailyFX. “I don’t think it means anything in terms of a big leg up for U.S. stocks. This is just a short-term, tactical move.”
Meanwhile, Asian stocks emerged less scathed Thursday as U.S. futures turned higher. The MSCI Asia Pacific Index fell 0.2%. Japan’s Topix closed down 0.1%, paring its loss after the Bank of Japan maintained policy and said it stands ready to take further action if needed. The Kospi slid 0.8% after a disappointing outlook from Samsung Electronics Co.
Euro Stoxx 50 futures were up 0.7% just hours before a European Central Bank policy decision. The Stoxx Europe 600 Index tumbled 3% to a five-month low Wednesday, as France imposed a new nationwide lockdown and Germany moved to implement one-month partial restrictions.
With news about Europe’s stricter virus measures “digested,” the U.S. market will revert to focus on the presidential election,” said Ben Emons, head of global macro strategy at Medley Global Advisors. “The blue wave remains priced in, which means the market will refocus on stimulus.”
House Speaker Nancy Pelosi said she hopes the recent selloff in U.S. stocks will prompt President Donald Trump to agree to Democratic demands in stalled stimulus talks and end a three-month stalemate that has added to tension ahead of the Nov. 3 vote. Polls predict Trump will be defeated by Joe Biden, whose Democratic Party is also expected to win control of Congress.
Positive news from Regeneron Pharmaceuticals Inc.’s late-stage trial of an antibody cocktail therapy for Covid-19 and possible measures emerging the ECB statement should add “positive momentum” heading into the U.S. equity market open Thursday, according to Medley’s Emons. Investors will also be looking toward earnings reports due after the close from major tech companies including Apple Inc., Amazon.com Inc. and Facebook Inc.
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