Stock futures steady after rally

Stock futures kicked off the overnight session slightly lower following an afternoon rally on Wall Street.

Shares of big banks including Goldman Sachs and Wells Fargo traded lower after hours, after the Federal Reserve said in its stress test results Thursday after market close that it would restrict dividends and share buybacks on financial companies for the third quarter. The move is intended to “ensure large banks remain resilient despite the economic uncertainty from the coronavirus event,” according to the Fed.

Earlier during the regular session Thursday, the financials sector had led the S&P 500’s advances, after regulators eased constraints over certain bank investments, which had first been implemented after the global financial crisis.

Meanwhile, further increases in coronavirus cases in some parts of the country stirred up investor consternation, with signs increasingly pointing to a chaotic reopening process. The governor of Texas – one of the first states to

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Stock futures open little changed, pausing after rally

Stock futures traded near unchanged Tuesday evening after a rally during the regular session sent a number of big tech names and the Nasdaq Composite to record closing highs.

Market participants continued to eye increases in coronavirus cases in some regions in the country, with each of California, Texas and Arizona posting their largest daily case additions so far, as of Tuesday’s counts. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said during an appearance before the House Energy and Commerce Committee Tuesday that the “next couple of weeks are going to be critical” in containing the virus in states in the South and West where surges have appeared.

Still, state and local officials have so far largely tabled the idea of shutting down their state economies again, with Texas Gov. Greg Abott saying that a new lockdown would be the last option.

Despite the

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Stock market history says a V-shaped rally makes total sense: Morning Brief

Thursday, June 18, 2020

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Corporate profits always ‘V’ no matter the recession.

The current recession has no parallel.

The coronavirus pandemic resulted in mandated closures of thousands of businesses across the country while tens of millions of workers lost jobs overnight. The stock market fell more than 30% in a matter of weeks. Economists called for the worst downturn on record.

And while signs of recovery in the labor market, the housing market, and consumer spending are encouraging, nowhere has enthusiasm about the economic future been as widespread as the stock market.

Earlier this month, the S&P 500 capped off its biggest 50-day rally in history. And while last Thursday saw stocks slide more than 5% in a single session, as of Wednesday’s close the market had clawed back more

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‘Robinhood is not behind the rally,’ Barclays says as retail demand surges

Unemployment may be at 13.3% — and maybe even up to 5 percentage points higher — but retail investors, the regular folks of the investing world, are  jumping into the market, channelling their inner Warren Buffett to be greedy when others are fearful.

Many narratives have emerged both on Wall Street and in the financial media that these new investors, using zero-cost brokerages like Robinhood to trade stocks, could be joining the Federal Reserve and the government’s coronavirus response in pushing the stock market up.

But in a research note circulated to clients Friday, Barclays said no, “Robinhood is not behind the rally.” Using the popular Robintrack database that offers insight on most popular positions and changes, analysts from Barclays Investment Sciences wrote that since March 2020, when the market bottomed out, stocks have generally done worse when Robinhood users get interested. 

“We have seen the opposite of the conventional

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The retail investor rally: Morning Brief

Tuesday, June 9, 2020

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Big money is chasing small money in the stock market

The stock market’s recent rally has been historic.

And a new wrinkle in this market narrative is the large role that retail traders appear to be playing in driving this rally.

In a note to clients published on Friday, Deutsche Bank strategist Parag Thatte looked at investor flows and positioning and found most investors still have record low exposure to equities save for one group: retail investors.

Thatte writes that there is “plenty of evidence that new retail investors raised exposure through the selloff and the rally, unexpectedly so, and institutional money across the systematic as well as discretionary spaces is now chasing.”

Thatte cites data from Robintrack — which tracks portfolio changes on Robinhood — as

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