By Peter Nurse
Investing.com - U.S. stocks are set to open lower Friday, amid continuing concerns about the growth of coronavirus cases and its impact on the prospects for economic recovery ahead of the upcoming earnings season.
At 7:10 AM ET (1110 GMT), S&P 500 Futures traded 5 points, or 0.2%, lower, Nasdaq Futures down 5 points, or 0.1%. The Dow Futures contract fell 55 points, or 0.2%.
More than 3 million Americans have already been infected by Covid-19, with three of the country's four most populous - Texas, California and Florida - posting record daily levels of related deaths.
Top U.S. pandemics expert Anthony Fauci, speaking earlier this week on a podcast hosted by The Wall Street Journal, said that new Covid-19 cases were seeing “exponential growth.”
“It went from an average of about 20,000 to 40,000 and 50,000. That’s doubling. If you continue doubling, two times 50 is 100,” Fauci said. “Any state that is having a serious problem, that state should seriously look at shutting down.”
U.S. equity markets have posted strong gains since the depths of March, helped by better-than-expected economic data and extraordinary fiscal and monetary aid from the U.S. authorities.
However, the recent surge in infections has raised doubts over the sustainability of those gains, as states start to reintroduce social distancing measures.
“I wouldn’t paint myself as a bear, but the risks between here and year-end are completely to the downside,” said Bank of America (NYSE:BAC) head of equity research Savita Subramanian Thursday.
The new earnings season starts in earnest next week. Investors will be watching bank earnings, in particular, for signs that the business shutdowns and massive job losses because of Covid-19 have begun to erode credit quality, which could leave banks holding a rising number of bad loans. Citigroup (NYSE:C) starts the ball rolling on Tuesday.
Oil prices weakened Friday, as the International Energy Agency warned that the recovery could be derailed by the resurgence of coronavirus - although it lifted its outlook for global oil demand this year marginally.
“The large, and in some countries, accelerating number of Covid-19 cases is a disturbing reminder that the pandemic is not under control and the risk to our market outlook is almost certainly to the downside,” the IEA said.
At 7:10 AM ET, U.S. crude futures traded 1.5% lower at $39.04 a barrel, on track for a weekly loss of around 3%. The international benchmark Brent contract fell 1.2% to $41.84, set to drop around 2%.
Elsewhere, gold futures rose 0.6% to $1,814.65/oz, set for its fifth straight weekly gain. EUR/USD traded at 1.1300, up 0.2%.