Wall Street to make subdued return after the long weekend

Proactive Investors Tuesday, 8 September 2020
After the long Labor Day weekend, US investors hoping for a resumption of upward momentum may have to wait a bit longer. Spread betting quotes indicate that even the gravity-defying NASDAQ Composite will open lower, at 11,272 (down 41 points). The Dow Jones average is expected to retreat 60 points to 28,073 and the S&P 500 is tipped to shed 32 points at 3,395. The recent stonking gains – particularly on the NASDAQ – have been driven by the mega-large technology stocks but early-morning focus has been on small businesses, with the NFIB Small Business Optimism Index climbing to 100.2 in August from 98.8 in July. Economists had expected a reading of around 99.0. “The uptick in the headline is due mostly to increases in earnings expectations, up seven points, and the key labour market components, which were released last week ahead of the official payroll report, as usual,” explained Ian Shepherdson, the chief economist at Pantheon Macroeconomics. “Hiring plans and jobs-hard-to-fill both rose by three points, and the former has now returned to its February pre-COVID level, 21. This is impossible to square, however, with the Homebase small business employment data, which show that payrolls in the sector have been falling outright since mid-August. We accept that the small business sector is in a state of flux, but the Homebase data come from a much bigger pool of firms than the NFIB sample, and have been a good guide to the official payroll numbers in recent months,” Shepherdson noted. Four things to watch for on Tuesday: Stock price reaction from electric car maker Tesla Inc (NASDAQ:TSLA) after it was given the cold shoulder by S&P Dow Jones Indices, who declined to add the firm to the S&P 500 index on Friday afternoon last week US consumer credit data for the month of July, which will be eyed hopefully to see a continuing of the rebound seen in June, which saw the figure rise by US$8.95 billion, however this missed market expectations of a US$10 billion increase. A higher figure is likely to indicate American consumers are borrowing and thus spending more Possible political and market fallout from recent comments by US president Donald Trump in which eh vowed to “decouple” the US economy from China, while simultaneously blasting his Democratic challenger for the presidency Joe Biden Positive movements from the dollar as it attempts to recover from a sell off last month, which could add pressure to gold prices and increase fears of a correction for the yellow metal

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