Here are the most important news, trends and analysis that investors need to start their trading day:
- Dow, S&P 500 set to bounce after four sessions of losses
- Covid mortgage bailouts expiring fast, but foreclosure crisis unlikely
- Biden outlines plan to mandate Covid vaccines for millions
- China's Xi, Biden hold second phone call of new U.S. administration
- Fed presidents Kaplan, Rosengren to sell individual stock holdings
U.S. stock futures bounced Friday after the Dow Jones Industrial Average and S&P 500 posted their fourth straight session of losses. The Nasdaq on Thursday saw its second down day in a row. All three stock benchmarks were tracking for negative weeks, as concern persisted on Wall Street about the Covid-19 delta variant's impact on the economic reopening. As of Thursday's close, the Dow was 2% away from last month's record close. The S&P 500 and Nasdaq were nearly 1% shy of their latest record closes earlier this month.
Investors are also wondering how headwinds for the economy and rising inflation might play into the Federal Reserve's decision on when to start tapering Covid-era bond purchases. The government said Friday its August producer price index rose 0.7%, a bit more than estimates, after a 1% jump in July. The ex-food and energy core rate increased 0.6%, matching expectations. On an annual basis, the index rose 8.3% for its biggest advance on record.
Extraordinarily high levels of home equity — thanks to the recent runup in home prices — have struggling borrowers in a far better position now than they were at the start of the pandemic. The number of active mortgage forbearance plans, in which borrowers were allowed to delay their monthly payments for 18 months, fell by more than 5% from the previous week, according to a new report from analytics firm Black Knight. The drop was driven by August expirations. Down from a roughly 5 million borrower peak in May 2020, there are still 1.618 million in forbearance programs, or 3.1% of all outstanding mortgages.
An exasperated President Joe Biden outlined a broad plan Thursday to boost Covid vaccination rates in the U.S., pressuring private employers to immunize their workforces as well as mandating shots for federal employees, contractors and health-care workers. The president's moves were supported by the American Medical Association, the National Association of Manufacturers and the Business Roundtable. However, the Republican National Committee intends to sue the Biden administration over the mandate. Also on Thursday, the Transportation Security Administration said it's doubling fines for travelers who won't follow federal mask mandates.
Biden and Chinese President Xi Jinping spoke Friday for the first time since February, as tensions between the world's two largest economies simmer. It was the second call between the leaders since Biden took office in January. A White House readout said "the two leaders discussed the responsibility of both nations to ensure competition does not veer into conflict." Chinese state media said Xi spoke of conditional opportunities for cooperation between the two countries on climate, Covid prevention, economic recovery and major international and regional issues.
Fed regional presidents Robert Kaplan and Eric Rosengren said they will sell their individual stock holdings as questions swirled regarding their trading in 2020. The Fed officials will sell all their stocks by the end of the month. They will put the proceeds in passive investments. Kaplan and Rosengren also pledged to not trade stocks while serving as Fed presidents. The announcements come after the Fed officials faced scrutiny surrounding investment activity in a year when central bank actions propped up financial markets during the Covid pandemic.
Correction: This story has been updated to reflect August PPI data was released Friday.