Inventory futures stay unchanged after the S&P 500 suffered a detrimental begin to the 12 months for the primary time since 2016
Stock futures remained stable in overnight trading on Monday after the S&P 500 suffered its first decline since 2016.
The futures on the Dow Jones Industrial Average rose 40 points. S&P 500 futures and Nasdaq 100 futures each gained 0.2%.
Movements in futures came after a sharp sell-off on Wall Street at the start of 2021. The S&P 500 fell 1.5%, its worst daily performance since October 27th. Ten out of eleven S&P 500 sectors posted losses, led by real estate.
The blue chip Dow lost 382 points after losing 700 points from its daily low. The Nasdaq Composite was down 1.4% as the FAANG block collapsed early in the new year.
The widespread sell-off of the market came ahead of the Georgia runoff election on Tuesday, which will determine whether Republicans can retain control of the Senate. In the meantime, rising Covid-19 cases around the world and new lockdown restrictions kept investors informed.
“Investors are feeling nervous this week,” Lindsey Bell, chief investment strategist at Ally Invest, said in an email. “COVID cases continue to rise and a new variant of the virus is spreading around the world. Tomorrow’s run-off elections in Georgia could determine the composition of the Senate and the market has generally done better in a divided Congress.”
Many fear that higher tax rates and more progressive policies could become a reality once the Democrats take control of the Senate. However, such an outcome could create the opportunity for a larger and faster package of expenses that will help support the market.
“Even if the Democrats get control, the margin will be remarkably small and analysts are skeptical of the possibility of a significant change in tax or regulatory policy,” Mark Hackett, chief of investment research at Nationwide, said in a note. “However, democratic control could trigger another round of coronavirus stimuli and possibly an infrastructure package.”
England imposed a third coronavirus lockdown on Monday as the region grappled with a more transmissible variant of Covid-19. New York State has confirmed its first case of the new tribe, Governor Andrew Cuomo said Monday.
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