Dow Futures Surge As Investors Focus on Slowing Coronavirus Fatality Rates; Oil Slides As OPEC Delays Emergency Meeting

As the global coronavirus pandemic enters its third month, investors are starting to see light at the end of the tunnel as death and infection rates slow in major hot spots around the world.
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The Monday Market Minute

  • Global stocks rally as investors focus on data showing death rates in major coronavirus hotspots, such as Italy, France and New York, show signs of abating.
  • New York records its first fall in coronavirus fatalities in a week, but health officials warn the worst is yet to come for U.S. citizens as the outbreak nears its third month around the world.
  • President Donald Trump says there is "light at the end of the tunnel", while Surgeon General Jerome Adams warns of America's "Pearl Harbor" moment. 
  • Global oil prices slide after OPEC delays emergency meeting, while Trump says he could slap tariffs on non-U.S. imports if markets don't stabilize.
  • U.S. stock futures suggest a solid open on Wall Street with the S&P 500 poised for a 100 point gain as benchmark 10-year Treasury yields slip to 0.65%.

U.S. equity futures bounced higher Monday, while global stocks booked solid gains, as investors focused on data that suggested coronavirus deaths were slowing as the pandemic entered its third month of outbreak in major economies around the world.

Italy, the European epicenter of the virus outbreak since late February, said fatalities have fallen to the lowest levels in at least five days, while the death toll in neighbouring France, where citizens have been enduring shelter-in-place orders for the past three weeks, may also be nearing a plateau. Spain, as well, recorded its fourth consecutive day of declining fatalities in Europe's fourth-largest economy.

Alongside the trillions in cash and support pledged by governments and central banks around the world, including some $6 trillion from the U.S. Federal Reserve and Congress, investors are starting to look towards the tail end of the global pandemic, which has taken the lives of nearly 70,000 people around the world since it was first identified in late January.

Still, even with death rates slowing in the state of New York, where more than half of the country's fatalities have been recorded, and encouraging predictions from President Donald Trump, U.S. Surgeon General Jerome Adams issued a stark warning Sunday that the worst is still yet to come.

"This is going to be the hardest and the saddest week of most Americans' lives, quite frankly,"he told Fox News on Sunday This is going to be our Pearl Harbor moment, our 9/11 moment, only it's not going to be localized." 

"It's going to be happening all over the country. And I want America to understand that," he added.  

Wall Street, nonetheless, looks prepared to enter the Easter-shortened week with a bullish outlook, as futures contracts tied to the Dow Jones Industrial Average suggest an 800 point opening bell gain and those linked to the S&P 500, which is still around 26% south of its February 19 peak, are indicating a 98 point advance for the broader benchmark, 

Global oil prices were also active Monday following a decision from OPEC leaders to delay a planned emergency meeting until later in the week amid ongoing negotiations between Russia and Saudi Arabia over production cuts.

The proposed cuts, first mooted by President Trump last Thursday, added rocket fuel to oil markets as crude rose by a record 31.7% for the week based on its Friday closing price.

However, with Trump now threatening tariffs on non-U.S. imports, and questions remaining as to the size and length of any output limit agreement among OPEC members, oil prices retreated in early Monday trading. 

"If I have to do tariffs on oil coming from outside or if I have to do something to protect our tens of thousands of energy workers and our great companies that produce all these jobs, I'll do whatever I have to do," Trump told reporters at the White House Sunday.

Brent crude futures contracts for June delivery, the benchmark reference for around 60% of global crude purchases, were last seen $1.14 higher from their Friday closing price in New York and changing hands at $32.97 per barrel in early European trading.

WTI crude futures for May delivery, which are more tightly connected to domestic gas prices, were marked $1.07 lower at $27.27 per barrel.

European stocks were also firmly in the green Monday, with investors following coronavirus infection data around the region's hotspots closely, as the Stoxx 600 gained 3% in early trading, lead to the upside by a 4.4% gain for Germany's DAX performance index.

In Britain, news that Prime Minister Boris Johnson had been admitted to hospital after his coronavirus symptoms worsened following ten days of self-isolation kept a cap on gains for the FTSE 100, which rose 2.22% in London, while the pound slipped to 1.2306 against at solid U.S. dollar.

Overnight in Asia, media reports that Japan is ready to declare a state of emergency over the accelerating pandemic failed to keep regional stocks from recording solid gains, with the Nikkei 225 rising 4.24% by the close of the session as the safe-haven yen eased to 109.23.

Prime Minister Shinzo Abe ultimately declared that seven of his countries prefectures should fall under under state of emergency orders, but conceded that national laws would mean the lockdowns won't be as stringent as in other countries around the region. 

Around the region, the MSCI ex-Japan benchmark was last seen 2.13% higher heading into the close of trading, paced by solid gains in Australia, Hong Kong and South Korea.