The Wednesday Market Minute
- Global stocks book solid gains at major economies look to cautious re-open and coronavirus infection rates finally begin to plateau.
- Oil prices surge after President Donald threatens Iranian ships in the Gulf region ahead of EIA inventory data at 10:30 am Eastern time.
- Trump also plans a 60-day freeze on Green Card applications citing record U.S. jobless claims.
- Senate backs $484 billion in support for small business and hospitals damaged by the coronavirus pandemic; House set to vote later this week.
- Wall Street futures suggest a weaker open ahead of first quarter earnings from Coca-Cola, Lockheed Martin and Travelers before the bell and Netflix after the close of trading.
U.S. equity futures jumped higher Wednesday, although an extended collapse in global crude prices kept investors on edge, as stronger-than-expected first quarter earnings and signals of a rollback in stay-at-home restrictions in some of the world's biggest economy lifted sentiment
Oil prices reversed earlier declines, however, after President Donald Trump said he had ordered the U.S. Navy to "shoot down" any Iranian ship that harasses an American vessel.
European leaders, including Italian Prime Minister Giuseppe Conte, are looking to follow the lead of several U.S. governors in gradually easing lockdown restrictions as coronavirus infection rates plateau and hospital deaths finally begin to slow more than a month after the outbreak, which has killed more than 177,000 people around the world.
The slow re-opening of the global economy, which faces its steepest recession on record this quarter and next, is a welcome development for investors who have battled plunging oil prices for the past week as they calculate the impact of a 30% decline in demand against record production, and swelling storage facilities, from markets around the world.
Oil prices reversed some of their historic slump Wednesday, which had at one stage pulled Brent crude futures contracts to the lowest levels in more than two decades, although the markdowns weren't powerful enough to ignite a spike in the U.S. dollar, and with stronger-than-expected earnings from Netflix (NFLX) - Get Report, Snap (SNAP) - Get Report and Texas Instruments (TXN) - Get Report last night, Wall Street looks set for a reasonably solid start to the trading session.
Equity market sentiment was further boosted by the Senate passage of a small business coronavirus rescue bill that will provide around $500 billion in fresh relief once it passes the House later this week.
Futures contracts tied to the Dow Jones Industrial Average suggest a 400 point opening bell gain for the 30-stock average, which is down just under 20% for the year, and a 44 point advance for the S&P 500, which has gained nearly 6% so far this month.
Another busy slate of earnings is on tap again Wednesday, with quarter reports from AT&T (T) - Get Report, Delta Air Lines (DAL) - Get Report, T-Mobile US (TMUS) - Get Report and Tesla (TSLA) - Get Report.
In the oil markets, front-month WTI futures contracts -- the new benchmark for U.S. prices that would have owners taking delivery of crude in June -- were last seen $1.92 higher at $13.49. Brent futures for June delivery, which benchmark around 60% of global crude purchases, were marked $1.20 higher at $20.53 per barrel after briefly trading as low as $15.98 per barrel, the weakest since 1999.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was 0.25% lower at 100.008 while benchmark 10-year Treasury note yields eased to 0.591%.
European stocks were firmer by mid-day trading Wednesday, as well, with the Stoxx 600 rising 1.8% and Britain's FTSE 100 gaining 2.35% in London as energy stocks climbed alongside oil prices.
Overnight in Asia, Brent crude's extended plunge kept the safe-haven yen well bid for most of the session, and that clipped any gains for the export-focused Nikkei 225, which closed 0.75% lower at 19,137.95 points.
The broader MSCI ex-Japan benchmark, however, was marked 0.75% higher heading into the close of trading thanks in part to modest gains in China and a solid 1% advance for the South Korean KOSPI.