Wall Street to head lower amid uncertainty over stimulus as virus cases rise in US

US stocks are expected to open mostly lower despite news of a new initiative to agree fresh stimulus measures, as doubts over whether the package is viable combined with rising cases of COVID-19 in the US to overshadow any optimism. Spread betting quotes indicate the Dow Jones industrial average will open about 80 points lower at around 28,890 while the broader-based S&P 500 is expected to slide 23 points to 3,669. The tech-heavy Nasdaq Composite is tipped to defy the trend and open 19 points firmer at 12,539. On the subject of tech stocks, electric cars maker Tesla has indicated it will raise up to US$5bn through the sale of new stock via an “at the market” offering programme. Demand for the company’s shares has been insatiable of late, with the shares up 13% over the last three days. It’s only about three months since the stock market glamour stock whacked out US$5bn in shares to the market. Chinese search engine and social media giant Baidu is travelling in the opposite direction, buying back shares from the market. It announced today it would increase its share buyback programme by US$1.5bn to US$4.5bn. In the old school sector of the stock market, United States Steel has opted to exercise its option to buy up the rest of Big River Steel for US$774mln – roughly the amount Elon Musk keeps in the coffee-cup holder well of his Tesla. The only economic reports scheduled for release in the US today are the NFIB’s small business survey for November and the final productivity and unit labour cost readings for the third quarter, according to Daiwa Capital Markets. “Regarding the latter, while the second estimate of GDP growth was unrevised, Daiwa America chief economist, Mike Moran, thinks that productivity will be revised down 0.8ppt to 4.1% AR [annualised rate] because of an upward revision to hours worked. Neither of these reports are likely to move the market, so the focus for investors will remain on any progress on fiscal stimulus negotiations,” Daiwa said. Talking of which, Chris Beauchamp at IG Group reckons the rise in the number of coronavirus (COVID-19) cases has lit a fire under US lawmakers, who are now talking about revising ideas of a stimulus package, albeit well below the US$900bn that was being talked about in the dog days of summer. “Even if the bill does go through, the lack of a ‘trillion’ in the headline could mean markets greet it with a collective shrug, deeming it insufficient to provide a real boost for the US economy,” Beauchamp suggested. Four things to watch for on Tuesday: In the company diary, Jack Daniel’s and Chambord maker Brown-Forman Corp (NYSE:BFB) is scheduled to deliver figures for its second quarter Share price reaction will be eyed from auto parts group AutoZone Inc (NYSE:AZO) after its first quarter earnings topped forecasts despite disruption arising from the pandemic On the macro front, the final non-farm productivity reading for the third quarter of the year is expected to show a fall to 5% from 10.6% in the second quarter Meanwhile, the NFIB business optimism index is predicted to show a rise to 105 in November from 101.4 in October