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Dow Jones futures point to a quiet open, tech stocks remain in focus

We examine the key market moves from the last few days as well as where futures markets suggest the Dow will open on Thursday, 9 July.

Dow Jones futures soft, tech remains in focus

At the time of writing, US futures traded down, if by just a small degree.

Indeed, as of 1:15AM (New York time), Dow Jones Industrial Average futures were trading down 12.5 points or 0.05%, implying that the key US benchmark would open slightly lower on Thursday.

The Dow Jones – which itself is over a century old – finished out yesterday’s session up 177 points at the 26,067 point level. The best performing Dow constituents from that session were Walt Disney, Apple, and Microsoft; while Merck, Wal-Mart and Dow were the worst performing.

As is illustrated by the Dow’s top-performing stocks, all eyes in recent weeks have been on the performance of the US tech sector – with the tech-focused Nasdaq Composite breaking new highs, last trading at 10,492.

Centrally, as the coronavirus sees the adoption of ecommerce accelerate, many investors and traders – not wanting to miss out – have pushed tech stocks higher in recent times. As IG’s market analyst, Kyle Rodda wrote on Thursday, Australian time:

‘True to form, it was the US tech sector that drove the US stock market gains overnight. The NASDAQ spiked by 1.44 per cent, to trade at new record highs, while The IT sector was responsible for 13 points of the S&P500’s advance.’

Looking at the individual performance of the FAANG cohort, on Wednesday, the Facebook share price rose 1.13%, Amazon added 2.70% to confidently trade above the US$3,000 per share level, Google (Alphabet) saw its stock creep up 0.73%, Apple rose 2.33% and Netflix gained 1.95%.

Elsewhere, Tesla’s recent share price performance looks itself to be emblematic of the optimism, or irrationality, around tech, with the stock up around 45% in the last month. Tesla’s market capitalisation – now standing at a staggering US$253 billion – confidently exceeds that of global automotive heavy-weight Toyota.

The coronavirus & a ‘V shaped’ recovery

Mind you, as markets continue to trend towards a ‘V-shaped’ recovery, coronavirus cases in the United States continue to rise at an alarming rate, last sitting at 3.15 million reported cases, against a global total of 12.17 million cases.

On that front, Kyle Rodda theorised that:

‘Seemingly to the relief of the market, the mortality rate in the US has remained relatively low, assaying some concerns regarding a potential second-round of economic lockdowns.’

Other bits and pieces

Finally, looking at the key economic releases due out Thursday, initial jobless claims data, for the week ending 4 July are set to be released, while continuing jobless claims data, for the week ending 27 June, are also set to be released.

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