The Wednesday Market Minute
- Global stocks retreat as investors continue to track coronavirus death and infection rates in the absence of real-time economic data.
- Four nations around the world have death totals that rise past 10,000 as New York state, and the broader U.S., record their worst single-day tallies of the global pandemic.
- Advisers to the German government suggest Europe's largest economy could contract by 10% this quarter as lockdowns suffocate both domestic and export demand.
- Global oil prices remain active as OPEC leaders debate production cuts and the U.S. Energy Department rejects the idea of domestic participation.
- U.S. stock futures suggest a firmer open on Wall Street with the Dow called 220 points higher heading into the start of trading.
Wall Street futures edged Wednesday, while oil prices continued to whipsaw amid speculation linked to potential output cuts, as investor optimism for fading coronavirus infection rates gave way to concern that the pandemic could linger well into the summer months.
U.S. stocks were given some late-morning support, however, from a statement from House Speaker Nancy Pelosi and Senate Leader Chuck Schumer, both Democrats, that said lawmakers will pursue a further $250 billion in small business support , and a further $250 billion in assistance for hospitals, states and low income households, amid the coronavirus shutdown.
Still, a solid Tuesday rally on Wall Street, which lifted the Dow by more than 900 points, lost steam in the final hours of trading last night as traders digested data from New York that suggested the largest single-day death total for the state since the outbreak began last month.
With more than 12,700 deaths nationwide -- and confirmed infections topping 400,000 -- and four countries around the world tallying fatalities of more than 10,000, optimism for a "flattening of the curve" in terms of global infection rates is starting to fade, with reports also raising questions as to whether people who have recovered from the virus will ultimately build immunity.
Investors were also troubled by data from Europe indicating Germany's economy, the region's largest, is likely to contract by around 10% over the three months ending in June as lockdowns suffocate domestic demand and export markets evaporate amid the global pandemic.
U.S. equity futures suggest a tepid start to the Wednesday session, the second last of the Easter-shortened week, with contracts tied to the Dow Jones Industrial Average indicating a 240 point gain and those linked to the S&P 500 guiding to a 23 point advance for the broader benchmark.
Global oil prices remained volatile in overnight trading as OPEC leaders, as well as non-member allies such as Russia, prepare for an emergency teleconference Thursday that will focus on output cuts for the cartel that were first mooted by President Donald Trump last week.
However, multiple media reports suggest OPEC isn't prepared to enact significant cuts without U.S. participation, a condition the Department of Energy rejected in a statement yesterday.
"With regards to media reports that OPEC+ will require the United States to make cuts in order to come to an agreement: The EIA report today demonstrates that there are already projected cuts of 2 (million bpd), without any intervention from the federal government," the DOE said.
Brent crude futures contracts for June delivery, the benchmark reference for around 60% of global crude purchases, were last seen 20 cents higher from their Tuesday closing price in New York and changing hands at $32.07 per barrel in early European trading.
WTI crude futures for May delivery, which are more tightly connected to domestic gas prices, were marked 85 cents higher at $24.48 per barrel.
More examples of cautious investor sentiment came from bond and foreign exchange markets, where the U.S. dollar index rose back towards its recent three-year highs against a basket of six global currencies and benchmark 10-year Treasury note yields rose to 0.71% in early European trading.
European stocks were also on the back foot, with the Stoxx 600 giving back 0.8% of its recent bounce from last month's 8-year low and Germany's DAX performance index sliding 0.65% in Frankfurt.
In London, where Prime Minister Boris Johnson remains in intensive care for a second day after suffering accelerated symptoms of his coronavirus infection, the FTSE 100 was marked 1% lower as energy stocks drifted south and the nation's biggest retailer, Tesco plc, unveiled coronavirus-related costs of nearly $1 billion.
Overnight in Asia, Japan's near $1 trillion stimulus plans gave transport stock on the Nikkei 225 a boost, lifting the benchmark to a session gain of 2.13%, but broader weakness in regional markets, as well as a bearish tone to the European session, allowed the region-wide MSCI ex-Japan index to slip 0.88% heading into the final hours of trading.