The Wednesday Market Minute
- Global stocks edge higher amid hopes of a speedy re-opening of major economies from coronavirus lockdowns, but President Trump's extended pressure on China keeps gains in check.
- Trump says he's pushing for a 'phase two' re-opening of the domestic economy, while pushing China to reveal what it knew, and when, about the coronavirus outbreak.
- European stocks sputter amid a mixed batch of corporate earnings and grim activity data, while the euro slides amid concern for the fate of the ECB's bond-buying program.
- Oil prices bump higher ahead of Energy Department data on crude inventories, extending a two-week rally that's lifted Brent by more than 90%.
- Wall Street futures suggest a cautiously higher open ahead of before-the-bell earnings from CVS Health and General Motors.
U.S. equity futures traded higher Wednesday, while the dollar traded firmer amid safe-haven flows from Europe and Asia, as President Donald Trump renewed his push to re-open the domestic economy and increased pressure on China to reveal what it knew, and when, about the coroanvirus outbreak.
Gains were limited, however, by data from payroll processing firm ADP, which indicated that private sector employment plunged by 20.24 million in April, a figure that might not capture the full extent of COVID-19 job losses.
Speaking to reporters during a trip to a Phoenix, Arizona-based factory producing face masks and operated by Honeywell (HON) - Get Report, Trump said he was preparing details for a 'phase two' re-opening of the U.S. economy even if, as heath expects have agreed, the conronavirus death toll continues to escalate in the coming weeks.
“Will some people be affected? Yes. Will some people be affected badly? Yes,” Trump told reports. “But we have to get our country open and we have to get it open soon ... I think our economy is going to be raging” next year."
Trump also doubled-down on his criticism of China's handling of the coronavirus outbreak, calling on Beijing to be more 'transparent' in sharing information on both its origin and it's early spread through the world's second largest economy.
Foreign Ministry spokeswoman Hua Chunying said Wednesday that China would "support looking back and summarizing the experience at an appropriate time to support global health cooperation', but stressed it opposed the presumption of guilt under the pretext of an investigation, or using the epidemic for political purposes.”
The rhetoric suggests the President is prepared to focus on his re-election campaign, as opposed to controlling the spread of the virus, a strategy that is likely to lead to an earlier-than-expected economic re-start, but could trigger concerns for a 'boomerang' impact of re-infection later in the autumn.
That concern left markets in a cautious mood overnight, with the safe-haven yen rising to a seven-week high against the U.S. dollar and stocks booking only modest gains amid mixed corporate earnings and battered risk sentiment.
European stocks bumped 0.1% higher in Frankfurt, while Britain's FTSE 100 gained 0.5% as the pound fell to 1.2370 following the weakest March construction activity figures on record.
Wall Street futures, meanwhile, suggest a modest 62 point opening bell gain for the Dow Jones Industrial Average, which remains down 16% for the year, and a 7 point advance for the S&P 500 heading into pre-opening bell earnings from CVS Health (CVS) - Get Report and General Motors (GM) - Get Report.
The Nasdaq Composite, which is just 1.8% from edging into positive territory for the year, is set for a 30 point opening bell gain.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies and has recently been a key indicator for stock market direction, rose 0.41% to 100.12 as both the pound and the euro slumped to multi-week lows amid record low activity data and concerns for the fate of the European Central Bank's bond buying program.
Oil prices, too, pared earlier gains heading into the start of the U.S. session, with WTI futures falling $1.36 from last night's close to trade at $23.20 per barrel as traders await official data on domestic crude inventory levels from the Energy Department at 10:30 am Eastern time.
Brent crude futures were last seen 71 cents lower at $30.26 following a two-week rally that has lifted the global benchmark nearly 90% as OPEC members begin cutting production and investors bet on a faster re-opening of major economies around the world.
Overnight in Asia, Japan's Nikkei 225 remained closed for the traditional May holiday festival, while the region-wide MSCI ex-Japan benchmark bumped 0.6% higher thanks to solid gains for stocks in Hong Kong and South Korea.