U.S. stock futures rallied on Monday. Dow Jones Industrial Average futures climbed up by 88 points, while S&P 500 and Nasdaq 100 futures also gained moderately. The S&P 500 rose by more than 1% on Thursday and Friday. It led the broader-market average’s first weekly advance in three weeks.
On Friday, data showed the biggest one-month job losses in the U.S. However, investors remained optimistic. It seems expectations of an economic reopening outweighs the negative data.
Italian Prime Minister Giuseppe Conte stated that Italy could ease its lockdown measures earlier than planned if the pandemic remains under control. The most populous state in Australia is also planning to let restaurants, playgrounds, and outdoor pools resume operations on Friday, according to the region’s premier.
Furthermore, Apple announced on Friday that it would start to reopen U.S. stores this week. However, the stores will have temperature checks. They will also limit the number of customers inside the store at once.
What about the S&P 500’s boost?
Adam Crisafulli, the founder of Vital Knowledge, noted that the world very much remains on the path to reopening, and this process will accelerate over the coming weeks. But he added that the S&P 500 is still overbought at current levels even as expectations of a gradual resumption of economic activity continue to rise.
The S&P 500 has skyrocketed by more than 33% since hitting an intraday low on March 23. That surge has been led mainly by mega-cap tech stocks such as Amazon, Facebook, Netflix, Apple, Microsoft, and Google-parent Alphabet. All of them have all rallied more than 20% since late March.
Furthermore, those stocks that would benefit from the economy reopening have risen sharply recently. MGM Resorts has jumped by more than 70%, while Disney soared by 27.3%. Still, Dan Russo of Chaikin Analytics thinks that despite the market’s strong performance at the index level, all isn’t as well as it seems. Energy, financial and industrial sectors are down more than 24% over the past three months.
