The Thursday Market Minute
- Global stocks mixed as investors tally the economic impact of the coronavirus pandemic while looking for signals that activity is set to reopen in the coming weeks.
- President Donald Trump says he'll issue guidelines on re-starting U.S. activity Thursday following data showing some of the biggest declines on record for key portions of the economy.
- Weekly jobless claims data showed another 5.245 million Americans filed for unemployment benefits last week, a figure that eased modestly from the recent record high of 6.867 million.
- Foreign holdings of U.S. Treasury bonds hit a record $7.066 trillion in February, data published Wednesday has shown, holding 10-year yields at around 0.62%.
U.S. equity futures traded higher Thursday as investors reacted to President Donald Trump's plan to issue guidelines on re-opening the world's biggest economy and weekly jobless claims eased modestly from record highs.
Trump told reporters in Washington Wednesday that coronavirus data in the United States suggest a "peak on new cases" that could give certain states the leeway needed to relax 'stay-at'-home' orders and re-open key portions of the domestic economy.
“These encouraging developments have put us in a very strong position to finalize guidelines for states on reopening the country, which we’ll be announcing ... we’re going to be talking about that tomorrow," Trump said.
The President's ultimate authority in compelling states to re-start activity remains questionable, however, and data from various sectors of the U.S. economy suggest extreme weakness at present - and likely more pain to come.
With more than 630,000 Americans infected by COVID-19, and more than 27,000 dead, the U.S. is undoubtedly the world's 'hotspot', and it's paying a hefty price: retail sales fell 8.7% last month, the most on record, while a key reading of manufacturing activity slumped to the lowest level since 1946.
The nation's biggest banks are also setting aside billions in credit provisions against bad loans as businesses around the nation shutter, and scores of non-financial companies are scrapping full-year profit guidance until they get a clearer picture of business activity in the months ahead.
Meanwhile, American job losses continue to mount, and initial claims data showed that a further 5.245 million people filed for unemployment benefits over the week ending April 11, taking the one-month total to around 21 million.
Housing starts, as well, showed significant weakness, falling 22.3% from last year to an annual rate of 1.216 million units while the Philadelphia Fed index of manufacturing activity in the mid-Atlantic region plunged to -56.6.
Still, against that grim backdrop, Wall Street futures are primed for a modest opening bell gain, with contracts tied to the Dow Jones Industrial Average indicating a 65 point advance and those linked to the S&P 500 priced for a 13 point bump to the upside.
Today's jobless claims come amid another mini-wave of first quarter earnings, with numbers expected from Morgan Stanley (MS) - Get Report, BlackRock (BLK) - Get Report, Abbott Labs (ABT) - Get Report and Danaher Corp. (DHR) - Get Report.
Abbott topped Street forecasts on the top and bottom line, while Morgan Stanley added to the $25.1 billion that Wall Street banks have set aside to cover a wave of potential loan defaults in the coronavirus downturn.
The U.S. dollar index, which tracks the greenback against a basekt of six global currencies and has tended to lead equity market sentiment amid most of the coronavirus crisis, drifted modestly lower in overnight trading before rising 0.27% to 99.74 as equity optimis began to fade.
Benchmark 10-year Treasury note yields,meanwhile, held at 0.645% following data showing that foreign holdings of U.S. government bonds hit a record high of $7.066 trillion in February.
European stocks got off to a solid open, with the Stoxx 600 rising 1% and Germany's DAX performance index gaining 1.1%, as data from the Continent showed indications that new coronavirus infections have slowed, potentially allowing for lockdown eases in major European economies.
In Britain, however, the 'stay-at-home' restrictions, which are likely to trigger the steepest quarterly GDP slump on record, could be extended for another three weeks, according to media reports, as the nation continues to struggle with Europe's highest infection rate amid 13,000 attributable deaths.
Global oil prices were mixed in early Thursday trading, following data from the Energy Department yesterday that showed a record 19.2 million increase in domestic crude supplies that underscored the difficulty OPEC members, as well as Russia, are likely to have in implementing their recently agreed output cuts.
Brent crude futures contracts for June delivery, the benchmark reference for around 60% of global crude purchases, gained $1.15 from their Wednesday closing price in New York to change hands at $28.84 per barrel in early European trading.
WTI crude futures for May delivery, which are more tightly connected to domestic gas prices, were marked 36 cents higher at $20.23 per barrel.
Overnight in Asia, a warning from the IMF that GDP in the Asia Pacific region could record its first year of 0% growth in six decades kept investors on the defensive, with the MSCI ex-Japan index slipping 0.5% and Japan's Nikkei 225 closing out the session 1.33% lower at 19,290.20 points.