The Thursday Market Minute
- Global stocks slide as coronavirus infections reach nearly 500,000 and investors switch focus from U.S. stimulus to the economic cost of the worldwide pandemic.
- Senate lawmakers approve the $2 trillion coronavirus aid package with a 96-0 tally; Congressional colleagues set to vote Friday.
- U.S. coronavirus deaths top 1,000, with nearly 70,000 recorded infections, according to data from Johns Hopkins Universitty
- Weekly jobless claims data shows claims rising to 3.28 million as Americans line-up for unemployment benefits amid a wave of coronavirus layoffs
- Fed Chair Jerome Powell tells NBC's 'Today' program that the central bank will never "run out of ammunition" to support the economy.
- U.S. equity futures suggest a return to selling on Wall Street, following the S&P 500's first back-to-back gains in six weeks, ahead of weekly jobless claims data at 8:30 am Eastern time.
U.S. equity futures held their ground Thursday as investors began to discount the impact of a $2 trillion Senate relief bill and focused on a grim assessment of the domestic job market amid the coronavirus pandemic.
More than 3.2 million Americans filed for unemployment benefits over the week ending on March 21, the Labor Department said, up from just 282,000 in the previous period. Continuous claims, the Department said, rose to 1.803 million.
However, with that number in the rear-view mirror, and the CBOE's market volatility gauge, known as the VIX, edging higher in early European trading, U.S. equity futures look set hold some of their gains from the past two days heading into the end of the week.
Futures contracts tied to the Dow Jones Industrial Average are indicating a 250 point opening bell gain while those linked to the S&P 500, which is still down 16.2% for the month even after its first back-to-back gains in six weeks, are suggesting a 28 point bump higher for the broader benchmark.
"The fact that over 3.2 million people filed for unemployment benefits last week is both staggering and unprecedented," Chris Zaccarelli, CIO at the Independent Advisor Alliance. "It is awful to see and represents what professional investors have been talking about for the past week."
"Clearly, the stimulus package that the Senate has passed and the House is about to take up is what is required to begin providing help to this economy that is dealing with an unprecedented drop in consumer demand and is now being exacerbated by a huge spike in unemployment." he added..
Senate lawmakers voted 96-0 last night in favor of their $2 trillion stimulus package, known as the Coronavirus Aid, Relief and Economic Security Act, or CARES, which directs at least $500 billion in loans and grants to U.S industry and a further $500 billion in immediate financial support to swathes of American families.
Congressional lawmakers, however, won't vote on the bill until Friday, adding to the partisan bickering that has delayed the package since its inception last week. President Donald Trump, however, has said he will sign the legislation 'immediately' after its passage in the House.
With both fiscal and monetary support in place -- by some totals exceeding $6 trillion dollars -- in order to offset the economic damage brought on the by coronavirus outbreak, investors are now looking to calculate that cost through individual data releases and the erosion of corporate earnings - both of which are in play today.
The U.S. dollar, as well, was on the back foot Thursday as investors trimmed bets on the greenback in favor of the yen and other Asia currencies thanks in part to the historic spending pledges made by U.S. lawmakers and the promise of unlimited monetary support from the Federal Reserve.
The U.S. dollar index was marked 0.75% lower at 100.32 while benchmark 10-year U.S. Treasury note yields were last seen rallying to 0.783%.
European stocks, too, sold off on news of both a German budgetary stimulus plan that will allow for increased borrowing from the region's biggest economy as investors grew increasingly worried about the ongoing spread of the cornonavirus both at home and in the United States, where WHO officials have warned could be the next epicenter of the outbreak.
The region-wide Stoxx 600 was marked 1.3% lower in the opening hours of trading, lead to the downside by a 2.15% decline for the DAX performance index in Germany, while Britain's FTSE 100 slipped 1.6% in the early hours of trading in London.
Global oil prices were similarly weak following data showing U.S. crude inventories rose by 1.6 million barrels, adding to nine straight weekly gains, and persistent concerns for world demand as the largest economies slide toward recession.
Brent crude futures contracts for May delivery, the global benchmark, were last seen 25 cents lower from their Wednesday close in New York and trading at $27.141 per barrel, while WTI contracts for the same month were marked 63 cents lower at $23.86 per barrel.
Overnight in Asia, Japan's Nikkei 225 slumped 4.5% on the session as the yen rallied to 110.04 against the greenback and Tokyo's governor, Yuriko Koike, warned of an "explosion" in new infections in the weeks ahead.