The Thursday Market Minute
- Global stocks mixed as investors fret over a worrying increase in coronavirus infections, while China's CDC claims recent outbreak is 'under control'.
- New infections spike in Texas and California, as well as other states, while Oklahoma preps for a Saturday Trump campaign rally, the largest indoor U.S. event in three months.
- Oil prices gain ahead of OPEC+ meeting Thursday; EIA data shows surprise 1.2 million barrel increase -- to record high 539.3 million -- in domestic crude stocks.
- U.S. equity futures suggest a lower open for Wall Street ahead after weekly jobless claims show a bigger-than-expected 1.5 million in new unemployment applications.
U.S. equity futures turned lower Thursday, while the dollar posted modest gains and bond yields fell, as investors retreated from risky markets amid data showing a worrying rise in coronavirus infections in key economies around the world.
Beijing's recent spike in new coronavirus infections, the highest since February, has prompted the closure of local schools and the suspension of several flights in and out of China, while a meat processing facility in northern Germany was reported to have found nearly 400 cases of COVID-19 among its workforce over the past few weeks.
However, the chief epidemiologist at China's Center for Diseases Prevention and Control, Wu Zunyou, told reporters Thursday that the Beijing outbreak was 'under control', a statement that boosted European stocks and bumped U.S. futures into the green.
In the United States, new infection rates were rising in California and Texas, with the latter seeing a record spike in hospitalizations for each of the past six days, while new cases in Oklahoma continue to rise ahead of campaign rally on Saturday for President Donald Trump that is expected to be the largest indoor event in the United States in at least three months.
Trump's re-election prospects were also in focus Thursday following the publication of extracts from an explosive book written by his former national security adviser, John Bolton, which accused the President of seeking help from foreign dictators in order to secure a second term election win in November.
A higher-than-expected reading of 1.5 million in weekly jobless claims looks to put U.S. equity futures on the back foot Thursday, as well, contracts tied to the Dow Jones Industrial Average indicating a 150 point opening bell decline. Contracts tied to the S&P 500, which is down just over 3.6% for the year, are priced for a 15 point advance while those linked to the Nasdaq are suggesting a 30 point retreat for the tech-focus index.
Broader market sentiment, however, looked cautious in the overnight session, with benchmark 10-year U.S. Treasury bond yields -- which move in the opposite direction of prices -- falling to 0.728% and the U.S. dollar index rising against a basket of its global peers to 97.12 in early European trading.
Oil prices followed U.S. equity futures higher after the China CDC statement, with traders looking to a Thursday meeting of OPEC producers, as well as non-member states such as Russia and Mexico, which is expected to discuss the longer-term fate of its recently-agreed output cuts, which are taking around 9.7 million barrels from the market each day.
WTI contracts for July delivery were marked 22 cents higher from their Wednesday close in New York and changing hands at $38.18 per barrel in early European trading while Brent contracts for August, the global benchmark, were seen 33 cents higher at $41.04 per barrel.
European stocks bounced into the green mid-way through the morning session as the China headline turned markets higher, but turned lower with the Stoxx 600 falling 0.3%.
In London, the FTSE 100 fell 0.3%, while the pound retreated to 1.2530 against the U.S. dollar, after the Bank of England boosted its quantitative easing program by £100 billion, adding to the trillions central banks around the world continue to pledge in support of an historic coronavirus-lead downturn.
Overnight in Asia, Japan's Nikkei 225 followed Wall Street lower to end the session 0.45% in the red at 22,355.46 points while the region-wide MSCI ex-Japan benchmark slipped 0.05% lower heading into the final hours of trading lead by pullbacks in South Korea and Australia.