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Wall Street paused its relentless record run Tuesday ahead of key updates from Walmart and Home Depot and October retail sales data as COVID infections continue to surge in states around the country.

The Tuesday Market Minute

  • Global stocks mixed as Wall Street peels away from yesterday’s record-highs amid rising coronavirus infection rates and fresh business and travel restrictions around the country.
  • U.S. infections are rising at 160,000 per day, with states from California to New Jersey imposing new restrictions on schools, businesses and inter-state travel.
  • Tesla shares soar after the clean-energy carmaker is told it will be added to the S&P 500 benchmark on December 21.
  • Oil price edge higher as technical advisors to OPEC meet today ahead of a December 1 decision on production cuts.
  • Wall Street futures suggest a softer open ahead of third quarter earnings from Walmart and Home Depot as well as October retail sales data at 8:30 am Eastern time.

U.S. equity futures edged lower Tuesday, peeling away from record high closes on Wall Street last night, as investors trimmed some of their vaccine trade bets amid soaring coronavirus infection rates and fresh restrictions on business and travel around the country. 

With the Dow printing its first all-time closing high since the pandemic began in February, and closing within just 50 points of a once-unthinkable level of 30,000 points, stocks are set to take a breather ahead of what could be three key readings of consumer health: third quarter earnings from Walmart  (WMT) – Get Report and Home Depot  (HD) – Get Report as well as October retail sales data from the Commerce Department.

U.S. consumers ended the third quarter with a flourish, lifting September retail sales by a stronger-than-expected 1.9%, but steady figures showing weekly jobless claim applications holding at around 750,000, and the phase-out of stimulus support from Congress in late summer, could pinch household budgets into the final months of the year.

Investors will also be tracking the acceleration of new COVID infection rates around the country, following yesterday’s jump of nearly 160,000 and a ten-day total of more than 1 million, as states from California to New Jersey impose fresh restrictions on schools and businesses amid what is growing into a deadly third wave of the pandemic.

That said, back-to-back vaccine updates from Pfizer  (PFE) – Get Report and Moderna  (MRNA) – Get Report have given investors a window into a post pandemic economy, with Bank of America’s closely-watched fund managers’ survey suggesting cash holdings have fallen to the lowest levels since February as investors look to put money back into risk markets heading into next year. 

U.S. equity futures look set for a cautious open, however, ahead of the twin retail earnings and the October retail sales data at 8:30 am Eastern time, with contracts tied to the Dow Jones Industrial Average priced for a 100 point pullback and those linked to the S&P 500, which closed at a record high 3,626.91 points, indicating a 14 point decline.

Tech stocks could, however, break that cycle with a modest 30 point gain for the Nasdaq. 

In terms of individual stocks, shares of Tesla  (TSLA) – Get Report will be front-and-center Tuesday after officials said it will be added to the S&P 500 benchmark on December 21, a move that could trigger as much as $50 billion in adjustments for the myriad active funds and passive ETFs that track the benchmark as they make room for Elon Musk’s $400 billion clean-energy carmaker.

Elsewhere, European stocks slipped from an eight-month high in early Tuesday trading as the euro scaled to multi-month highs of 1.11866 against the U.S. dollar and investors grew increasingly concerned with accelerating infections in the world’s biggest economic bloc.

The Stoxx 600 benchmark slipped 0.16% in the opening hours of trading in Frankfurt, while Britain’s FTSE 100 fell 0.5% in London.

Oil prices were little-changed, but remain some 15% higher on the month, as technical advisors to OPEC members meet later today to prepare the cartel for its December 1 meeting on production cuts, which could be maintained at 7.7 million barrels per day heading into the start of the year amid concerns for waning global demand.

WTI crude futures contracts for December delivery, the U.S. benchmark, traded 3 cents higher from their Monday close in New York and were changing hands at $41.37 per barrel in early European dealing, while Brent contracts for January delivery, the global benchmarked, edged 4 cents higher to $43.86 per barrel.

Overnight in Asia, stocks continued to climb amid hopes for a near-term rollout of either the Pfizer or Moderna vaccine, which, alongside consistently strong data from China and the expectation of stronger ties between Washington and Beijing in a Joe Biden administration, has lifted the MSCI ex-Japan index another 1.7% to a 1987 high and boosted the Nikkei 225 in Tokyo a further 0.42% to a fresh 29-year peak of just over 26,000 points.