By Peter Nurse
Investing.com -- U.S. stocks are seen opening sharply lower Monday as investors fretted about the rising number of coronavirus cases and the potential for new containment measures to derail the economic rebound.
At 8 AM ET (1200 GMT), S&P 500 Futures traded 33 points, or 1%, lower, the Dow Futures contract fell 284 points, or 1%, while Nasdaq 100 Futures dropped 90 points, or 0.8%.
Weighing heavily on investors’ confidence has been the resurgence of Covid-19 cases in the northern hemisphere as cooler weather starts to arrive. In Europe, France reported a record daily rise over the weekend, while Italy has ordered bars to close early and Spain has issued a nationwide curfew.
The news in the U.S. isn't much better, with the country seeing its highest ever number of new Covid-19 cases in the past two days, even affecting some aides of Vice President Mike Pence. Hospitalizations are also rising and deaths are trending upwards, yet White House chief of staff Mark Meadows told CNN that "we aren't going to control the pandemic."
Yet, despite this news, a new coronavirus relief package seems very unlikely to happen before next week’s presidential election. House Speaker Nancy Pelosi and Meadows accused each other of “moving the goalposts” in negotiations over the weekend, suggesting there still is too large a gap between the two sides for a compromise to be reached promptly.
This will be the busiest week of the earnings season so far, with almost 170 S&P 500 companies set to report. The major focus is likely to be on the big tech names, with Microsoft (NASDAQ:MSFT) reporting Tuesday and Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN) and Twitter (NYSE:TWTR) all reporting after the closing bell on Thursday.
Looking at economic data, the main release Monday will be the September new home sales number, with the housing market still showing strong growth. However, the week’s major release will be the preliminary estimate of third-quarter GDP on Thursday, which is expected to see a record rebound of 31.9% after a historic 31.4% plunge in the second quarter.
Oil prices slumped Monday, weighed by the rise in coronavirus cases in the U.S. and Europe, traditionally two of the largest energy consuming regions in the world.
Oil traders will also be keeping an eye on the progress of tropical storm Zeta, as it’s poised to turn into a hurricane and disrupt oil production in the Gulf of Mexico.
U.S. crude futures traded 2.3% lower at $38.93 a barrel, while the international benchmark Brent contract fell 2.1% to $41.20. Brent fell 2.7% last week and WTI dropped 2.5%, their first weekly losses in three.
Elsewhere, gold futures was flat at $1,905.40/oz, while EUR/USD traded 0.3% lower at 1.1822.