S&P 500 futures ticked up Monday in a muted start to the week for stocks as investors awaited fresh cues on how the global economy and major businesses are doing.
Gold rallied to a fresh record, propelled higher by rising coronavirus infections around the world that added to the uncertainty about the economic outlook. The U.S. dollar dropped to its lowest level in almost two years against a basket of major currencies, with investors betting that the Federal Reserve will continue to keep the spigot turned on for cheap money and backstop the U.S. economy.
This week, investors are monitoring developments on a highly anticipated U.S. stimulus package, earnings reports from some of the world’s biggest companies, closely watched data on how the American and European economies fared during the second quarter and the Federal Reserve’s latest views.
Futures tied to the S&P 500 edged up 0.5%, suggesting the benchmark may erase last week’s tepid losses after the opening bell.
“There’s some optimism that the Fed’s likely message of `lower for longer’ might be a positive one this week,” said Seema Shah, chief strategist at Principal Global Investors. “But investors remain cautious about the U.S.”
Futures contracts for delivering gold in August shot up 2% to $1,936.10 a troy ounce, topping the previous high of $1,923.70 in September 2011. The advance extends a summer surge for the precious metal, which has benefited from uncertainty about the outlook for the global economy, a broad decline in interest rates, and the weakening dollar. Silver jumped 6.2%.
The ICE Dollar Index, which measures the U.S. dollar against a basket of currencies, fell 0.6% to its lowest level since September 2018.
Real yields, which reflect the value of bond yields after adjusting for inflation expectations, have plunged around the world as central banks slashed interest rates and unleashed stimulus to address the economic hit from the pandemic. The real yield on U.S. Treasurys has dropped to 2012 levels, which is driving a sell off in the dollar, according to Derek Halpenny, head of research at MUFG Bank.
“At the moment, there’s quite compelling evidence that the economy is flatlining,” said Mr. Halpenny. “Gold is your best form of protection as an investor, as long as real yields continue to fall lower.”
The yield on the 10-year U.S. Treasury ticked down to 0.572%, from 0.589% Friday.
Republicans are set to release their proposal for the next coronavirus relief bill on Monday, which will kick off a round of high-stakes negotiations with Democrats as millions of Americans are on the verge of losing expanded unemployment benefits. Lawmakers now have little time before the $600 weekly supplement to jobless benefits ends.
Also on Monday, data on U.S. durable-goods orders for June are expected to show an increase for the second consecutive month after manufacturers ramped up production to meet a bounceback in demand. The figures are due to be released at 8:30 a.m. ET.
Investors’ concerns about the global outlook have been exacerbated by the rise in new coronavirus cases across the U.S. and other parts of the world. The number of infections climbed over the weekend to surpass 16 million globally, and American officials urged residents to comply with orders made to slow the virus’s spread.
A woman wearing a face mask walks past a bank's electronic board at Hong Kong Stock Exchange.
Photo: Vincent Yu/Associated PressOverseas, stocks were mixed. The pan-continental Stoxx Europe 600 benchmark was largely flat as worries about recent outbreaks of the virus in Spain and the implications for the travel industry weighed on sentiment, analysts said.
Losses in European stocks were led by companies tied to the travel industry after governments in the region reimposed restrictions on some travel following the rise of infection hotspots in Spain. Shares in budget airline easyJet dropped 11.3%, while British Airways-parent International Consolidated Airlines Group fell 7.9%.
Shares in German software company SAP rose 3.2%.The company said Sunday it would spin off its American subsidiary, Qualtrics, with an initial public offering in the U.S. SAP bought Qualtrics ahead of its planned IPO in 2018 for around $8 billion.
China’s main stocks benchmark, the Shanghai Composite Index, closed up 0.3%. The equity gauge in Hong Kong ticked down 0.4%, while Japan’s Nikkei 225 eased 0.2% lower.
In commodities, Brent crude, the international oil benchmark, fell 0.4% to $43.60 a barrel.
Write to Anna Isaac at anna.isaac@wsj.com
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