The Tuesday Market Minute
- Global stocks steady as worldwide spread of the coronavirus slows, even as the rate of deaths and confirmed infections continues to escalate inside of China.
- China confirms 425 deaths and 20,348 infections, while Hong Kong reports first fatality linked to the deadly respiratory-focused virus.
- Solid ISM manufacturing data yesterday in the US, as well as improving PMI data from Europe, underpin beat-down stocks and allow for solid opening bell gains in Frankfurt and London.
- Global oil prices edge higher after closing in bear market territory last night, but demand concerns linked to China's coronavirus factory shuttering keeps gains minimal.
- European stocks on pace for biggest single-day gain since October; Surprise BP profits drive FTSE 100 higher in London.
- Iowa Democrats fumble caucus results, citing "inconsistencies" in precinct reporting, and don't expect formal announcement until later today.
- U.S. equity futures suggest a firmer open on Wall Street ahead of durable goods orders at 10:00 am Eastern time and earnings from Clorox, ConocoPhillips and Ralph Lauren before the start of trading.
U.S. equity futures bounced higher for a second consecutive session Tuesday, following on from solid gains in Europe and Asia, as investors hoped the slowing spread of the coronavirus outside of China, as well as early signals of improving factory activity in major economies around the world, can ignite a February market rebound.
China's National Health Commission has confirmed 425 deaths linked to the coronavirus, as well as 20,348 cases nationwide, most of which remain within the boundaries of Huebi province, home to the central industrial city of Wuhan where the outbreak is thought to have originated.
Two further deaths outside China -- including an elderly patient this morning in Hong Kong -- have kept concerns for the international spread of the disease elevated, but thus far the rate of increase outside of China has slowed from late last week.
With U.S. stocks rallying last night on the strength of stronger-than-expected manufacturing activity data for January -- which showed the first sector growth in five months -- and falling oil prices which ease energy costs for emerging market economies, Asia stocks booked firm gains Tuesday, setting up Wall Street for a solid opening bell.
Futures contracts tied to the Dow Jones Industrial Average suggest a 390 point opening bell gain for the 30-stock average, while those linked to the S&P 500 are indicating a 40 point advance for the broader benchmark.
Tesla Inc. (TSLA) - Get Tesla Inc Report shares extended gains Tuesday, following on from the biggest single-session advance in six years yesterday, as it closes in on Toyota Motor Co. (TM) - Get Toyota Motor Corp. Report for the title of world's most valuable carmaker and a $900 price tag.
U.S. gaming stocks tumbled in pre-market trading, however, after authorities in China said they would close all casinos in Macau, the world's biggest gambling location, for at least half a month as part of its effort to stem the spread of the coronavirus.
Wynn Resorts Ltd. (WYNN) - Get Wynn Resorts, Limited Report , which generates around 70% of its earnings from Macau gaming, was marked 2.8% lower in pre-market trading at $125.00 each, while rival Las Vegas Sands Corp. (LVS) - Get Las Vegas Sands Corp. Report, with around 60% Macau earnings exposure, was seen 3.8% lower at $64.03 per share. MGM Resorts International (MGM) - Get MGM Resorts International Report, meanwhile, were marked 3.25% lower at $30.20 each
Nasdaq Composite futures are guiding for a 125 points gain for the tech-focused benchmark. despite weakness from last night's fourth quarter earnings from Google parent Alphabet (GOOGL) - Get Alphabet Inc. Class A Report, which beat Street forecasts with a bottom line of $15.35 per share but fell shy of estimates for revenues with a $46.08 billion tally.
Investors will also be focused on results from last night's caucuses for the Democratic party in Iowa, which were delayed owing to "inconsistencies" in totals from the state's voting precincts in what could be a major embarrassment for the party as it attempts to identify a candidate to take on incumbent President Donald Trump in elections later this year.
Party officials said the results could be published this morning, but gave no firm timetable for their release.
President Trump will also deliver his fourth State of the Union address later today in Washington, although it is likely to be overshadowed by both developments in Iowa and tomorrow's final impeachment vote in the Senate.
European stocks were notably firmer at the start of trading Tuesday, thanks in part to stronger-than-expected fourth quarter earnings from oil major BP Plc (BP) - Get BP Plc Report and the follow-on effect of stronger manufacturing PMI data for the Eurozone, which expanded at the fastest pace since June of last year in January.
The Stoxx 600 was marked 1.4% higher by mid-day trading, lead by a 1.5% for the DAX performance index in Germany, while Britain's FTSE 100 added 1.4% by lunchtime in London.
In Asia, China shares booked a modest rebound from yesterday's sell-off -- the worst in nearly five years and one that erased more than $400 billion in equity value -- thanks in part to efforts by the government to steady bank and market liquidity with billions of fresh cash and targeted interest rate cuts.
The MSCI ex-Japan benchmark gained 1.6% heading into the final hours of trading while Japan's Nikkei 225 booked a 0.5% gain on the session to lift the index to a 23,084.59 point close.
Global oil prices were also seen modestly higher in early Tuesday trading, after slumping into bear market territory last night -- a condition in which prices fall 20% from a previous peak -- as investors count the economic costs of the coronavirus on China crude demand.
Brent crude futures contracts for April delivery, the global benchmark for pricing, were last see seen 95 cents higher from their Monday close in New York and trading at $55.40 per barrel, while WTI contracts for the same month were seen $1.27 higher at $51.38 per barrel.