US stocks on track to fall as investors mull downbeat economic data

European shares erased an early advance

Photograph: iStock

Photograph: iStock

 

US equity futures drifted lower in a muted start to the third quarter as investors mulled downbeat economic data and fresh warnings about the spread of the coronavirus. European stocks fluctuated.

Contracts on the three main American equity gauges pointed to modest losses at the open, a day after the S&P 500 Index rounded out a 20 per cent second-quarter surge. The Stoxx Europe 600 Index erased an early advance, with data showing German unemployment rose to the highest level in nearly five years and UK businesses reporting a record slump in sales. Volumes on European bourses were well below average, with a technical glitch affecting trading in the region.

Treasuries edged lower and the dollar was steady ahead of minutes from the Federal Open Market Committee’s June meeting. Gold was near $1,800 an ounce.

Though signs have been mounting that the global economy is finding its footing after months of lockdown, accelerating virus infections threaten to set back reopenings and stall the recovery. New cases in America could rise to 100,000 a day if behaviours don’t change, infectious-disease expert Anthony Fauci said.

Good news

“We feel like a lot of the good news is priced in,” Jim McDonald, chief investment strategist at Northern Trust, said on Bloomberg TV. “The market’s got some optimism that we are going to see more of a V-shaped recovery, so there is risk of some modest disappointment.”

Elsewhere, oil rose after its best quarter in almost three decades following a report pointing to the first drop in US crude stockpiles since May. Shares in Tokyo slid after data showed confidence among large manufacturers in Japan fell to the lowest since 2009, while stocks ticked higher in Shanghai and Sydney. – Bloomberg