The Wednesday Market Minute
- Global stocks steady, while oil prices leap, as investors continue to track new coronavirus case data and tally the economic damage of the outbreak.
- Global coronavirus cases could hit 1 million by the end of the week, with deaths topping 50,000, as the outbreak spreads throughout north America.
- Oil rallies as President Donald Trump attempts to broker a truce between Russia and Saudi Arabia on crude prices and invites U.S. energy executives to the White House Friday.
- Initial jobless claims show another 6.6 million Americans filed for unemployment benefits last week as some 80% of the country falls under lockdown orders.
- The US dollar continues to hold gains despite Fed efforts to ease greenback funding costs with targeted repos, while benchmark 10-year Treasury note yields hold at 0.605%.
- U.S. equity futures suggest an opening bell rebound on Wall Street ahead of weekly jobless data at 8:30 am Eastern time and second quarter earnings from Dow component Walgreens Boots.
Wall Street futures bounced higher Thursday, while global stocks were pulled into positive territory thanks in part to an overnight surge in oil prices, as investors brace for more grim U.S. jobs data and continue to track the rising total of global coronavirus infections.
Gains were pared, however, after data showed a record 6.648 million Americans filed for unemployment benefits last week, following an earlier total of 3.3 million, providing another real-time benchmark for investors as to the extent of the damage that coronavirus has brought to the world's biggest economy.
With more than 80% of the U.S. now under some form of lockdown, following stay-at-home orders issued in Florida, Georgia and Mississippi yesterday, the U.S. economy will continue to sputter for at least the next month as workers decamp to home offices and stores and factories shutter for the coming weeks.
"Difficult days are ahead for our nation," President Donald Trump told reporters during his daily press briefing Wednesday evening as U.S. coronavirus cases neared the 30,000 mark. "We're going to have a couple of weeks, starting pretty much now, but especially a few days from now, that are going to be horrific."
With job losses that are likely to rise further in the weeks and months ahead, and White House officials warning of as many as 240,000 deaths from a cornavirus pandemic that is likely to infect at least a 1 million people around the world in just a few day's time, last week's stock market optimism will be difficult to maintain in the coming sessions.
That said, Wall Street futures look set for a solid open Thursday, propped up in part by renewed strength in energy stocks following an overnight rise in oil prices after President Trump vowed to broker a deal between Russia and Saudi Arabia that would end the price war currently raging between the world's second and third largest producers.
"Worldwide, the oil industry has been ravaged," Trump said Wednesday. "Its very bad for Russia, its very bad for Saudi Arabia. I mean, its very bad for both. I think they’re going to make a deal."
Contracts tied to the Dow Jones Industrial Average are indicating a 55 point opening bell gain, following last night's near 1,000 point plunge, while those linked to the S&P 500 suggest a 5 point advance for the broader benchmark.
Trump said he'll meet with oil executives in the White House on Friday, and hopes to have a deal between Russia and Saudi Arabia, who have been ramping up production following the collapse of their production limit agreement last month in Vienna, in "a few days".
Brent crude futures contracts for May delivery, the benchmark reference for around 60% of global crude purchases, were last seen $2.62 higher from their Wednesday closing price in New York and changing hands at $27.36 per barrel in early European trading.
WTI crude futures for May delivery, which are more tightly connected to domestic gas prices, were marked $2.18 higher at $22.49 per barrel.
Elsewhere, the U.S. dollar index rose 0.1% to 99.74 against a basket of six global currency peers as investors continued to favor safe-haven assets in an overnight session defined by cautious moves in stocks, while benchmark 10-year notes rallied to 0.565% before easing to 0.58% in early New York trading.
Energy stocks were also supporting European equity gains Thursday, with London's FTSE 100 rising 0.6% in the opening hours of trading while the region-wide Stoxx 600 benchmark bumped 0.4% higher to 310.89 points.
Overnight in Asia, the wave of selling on Wall Street washed over into early trading in Tokyo, where the safe-haven yen rallied to 107.26 against the greenback, pushing export stocks lower and clipping 1.37% from the Nikkei 225.
The region-wide MSCI ex-Japan index, meanwhile, was marked 0.44% higher as the session drew to a close, thanks to solid gains for China stocks as coroanvirus case number receded and the economy begins its slow march to pre-outbreak levels of activity.