U.S. Stock Market

U.S. Stocks Mixed Ahead Of The Weekend

Most Asset Classes Fail To Find Direction

S&P 500 futures are mostly flat in premarket trading as traders evaluate whether the recent surge in the number of new coronavirus cases will lead to a new series of lockdowns.

The U.S. dollar is flat against a broad basket of currencies, and the U.S. Dollar Index  continues its attempts to settle above the resistance at 97.5.

Gold is also flat and stays above the key $1750 level. The lack of action in the U.S. dollar and gold shows that markets are undecided about the next move.

Oil is swinging between gains and losses as demand for oil increases but fears about the second wave limit gains.

The Fed Tells Banks To Limit Dividends At Current Levels

While the economy has started to rebound after the acute phase of the crisis, the recovery will be a long process. In this light, the U.S. Federal Reserve has decided that banks will need to suspend share buybacks in the third quarter. At the same time, dividends should not exceed current levels.

The Fed has also told banks to submit updated capital plans as it prepares for a long fight against the consequences of the coronavirus disruption.

It remains to be seen whether the market will be worried about the Fed’s move, but banks like JP Morgan or Bank of America are losing ground in the premarket trading session.

Personal Spending Rises By 8.2%

The U.S. has just provided data for Personal Income and Personal Spending for the month of May.

Personal Income decreased by 4.2% month-over-month compared to analyst expectations which called for a decrease of 6%.

Personal Spending increased by 8.2% month-over-month while analysts forecasted growth of 9%.

Personal Income is volatile due to the challenging situation in the job market and various aid packages. In this light, Personal Spending is a more important metric in the near term as it shows the consumers’ desire to spend money.

While Personal Spending was worse than expected, the difference between the analyst consensus and the actual report is not big so it should not have a major impact on today’s trading dynamics.

For a look at all of today’s economic events, check out our economic calendar.