Dow Futures Edge Higher After Weekly Jobless Claims Fall to 1.314 Million; Record Coronavirus Infections Cap Gains

The U.S. recorded the single-day record for global coronavirus infections Wednesday, tallying 60,000 new cases as the pandemic continues its spread through southern and southwestern states.

The Thursday Market Minute

  • Global stocks edge higher, U.S. equities stall as coronavirus infections continue to rise, spurring new lockdown orders around the world.
  • U.S. cases rise by a record 60,000 Wednesday, taking the domestic total past 3 million, while worldwide infections pass 12 million amid spikes in South America and parts of Europe.
  • The dollar sags against major currency peers are investors track COVID cases in foreign exchange markets, with the yuan hitting a four-month high against the greenback.
  • Oil prices steady after Energy Department data shows a spike in U.S. gasoline demand, but a bigger-than-expected decline in domestic crude stocks.
  • U.S. equity futures suggest a flat open on Wall Street ahead of earnings from Dow component Walgreens Boots Alliance and weekly jobless claims data at 8:30 am Eastern time.

U.S. equity futures drifted higher Thursday, while the dollar sagged against a basket of its global peers, as a record rise in domestic coronavirus infections clipped investor sentiment ahead of jobs data that could raise questions over the strength of the economic recovery.

Stocks were boosted, however, by a stronger-than-expected reading of weekly jobless claims, which fell for the 14th consecutive week to 1.314 million. Continuous claims, meanwhile, fell to just over 18 million, the lowest since late April.

More than 60,000 new coronavirus infections were recorded yesterday, according to official data from the Centers for Disease Control, the single-largest daily total of any country since the outbreak began in early January. 

The tally lifts the U.S. caseload past the 3 million mark, and its spread into new areas of the country -- particularly in the south and south west -- have drawn concern from investors and Federal Reserve officials alike as states review their re-opening plans and issue new restrictions on businesses and public gathers.

Outside of the United States, infection were also seen rising in Japan, where Tokyo tallied a record 224 new cases yesterday, and in South America, where a record increase in Argentina boosted the global infection total past the 12 million mark.

Collectively, the figures -- as well as a lack of a coordinated response from world governments and the U.S.'s decision to leave the World Health Organization -- have ignited questions about the ability of the global economy to sustain its current recovery.

Much of that concern, however, has played out in foreign exchange markets, where currencies of countries with stable or falling infection rates are outperforming those that are seeing a spike in new cases.

China's yuan, for example, hit  a four-month high of 6.98 against the U.S. dollar Thursday, while the Euro rose to a one-month peak of 1.1343 and the pound hit a three-week high of 1.2649 in early European trading.

Central bank and government stimulus continue to support stocks, however, as has the relentless rise in U.S. tech giants such as Apple  (AAPL) - Get Report, Amazon  (AMZN) - Get Report and Microsoft  (MSFT) - Get Report, which have powered the Nasdaq to five consecutive all-time highs and helped clip the year-to-date decline for the S&P 500 to just 1.88%.

Futures contracts suggest a tepid start to the trading session Thursday, however, with contracts tied to the Dow Jones Industrial Average and S&P 500 indicating only modest opening bell gains. 

Two Dow components were early market movers Thursday, with Walgreens Boots Alliance  (WBA) - Get Report falling 3.4% after weaker-than-expected third quarter earnings and Microsoft rising 1%, while adding 20 points to the benchmark, after a price target upgrades from Wedbush and Morgan Stanley.

Outside of the U.S., stocks in Europe were solid -- despite the gains for the Euro and a disappointing rebound for May exports out of Germany -- as better-than-expected quarterly earnings from software giant SAP supported the tech sector and helped lift the Stoxx 600 benchmark 0.33% higher in early Thursday trading.

China stocks also continued to rally on hopes of a near-term recovery and further government stimulus, with investors buoyed by a Monday editorial in a state-controlled newspaper that praised the strength of the markets.

China's CSI 300 hit a five-year high of 4,840.77 points Thursday, while a 1.4% gain for the Shanghai Composite added to regional gains that took the MSCI ex-Japan benchmark 0.72% higher into the close of trading. 

Japan's Nikkei 225, meanwhile, closed 0.4% higher at 22,529.29 points. 

Global oil prices were little-changed, as demand concerns and a larger-than-expected 5.7 million barrel increase in domestic crude stocks from the Energy Department offset figures showing a solid rebound in U.S. gasoline consumption last week.

WTI contracts for August delivery, the U.S. benchmark, traded 8 cents lower from their Wednesday close in New York and were changing hands at $43.32 per barrel in early European dealing while Brent contracts for August, the global benchmark, were seen 5 cents lower at $40.85 per barrel.