The Friday Market Minute
- Global stocks gain as US moves to re-open world's biggest economy and data suggests a nascent coronavirus treatment is showing promise for patients suffering from the deadly disease.
- President Trump lays out a three-stage plan to re-start activity, vowing "we’re going to build this economy back bigger, better, stronger than ever before."
- Gilead's remdesivir is seeing much better-than-expected trial results, according to a study at the University of Chicago, raising hopes for a comprehensive treatment.
- China GDP contracts for the first time since records began in 1992 last quarter, but a better-than-expected industrial production reading for March supports stocks.
- US oil prices test 20-year lows after OPEC slashes global demand forecasts and domestic inventories continue to rise.
- Wall Street futures suggest solid open Friday ahead of first quarter earnings from Honeywell, Procter & Gamble and Schlumberger.
U.S. equity futures surged higher Friday as investors drew encouragement from President Donald Trump's plan to re-open the world's biggest economy and reports that an experimental coronavrius treatment is showing promise in treating late-stage patients suffering from the deadly disease.
Wall Street was also buoyed by Boeing Co.'s (BA) - Get Report announcement that it will re-start production at its Seattle-based facility, where it assembles some of its biggest jetliners, in a move that bring around 27,000 people back to work.
With President Trump detailing a three-stage process to bring the world's largest economy back online "one careful step at a time", coronavirus infection rates starting to plateau and a specialist medical website, STAT, reporting that Gilead Science's (GILD) - Get Report nascent coronavirus treatment, remdesivir, has induced repaid recoveries in patients participating in a University of Chicago hospital study, investors were happy to accelerate risk-on bets in overnight trading even amid some of the weakest China economic data on record.
China's GDP, in fact, collapsed by -6.8% over the three months ending in March, according to the National Statistics Bureau, the first contraction since records began in 1992.
A modestly better-than-expected reading for March industrial output, as well as ongoing plans for both fiscal and monetary support for the world's second largest economy provided some support to the grim assessment, but the data nonetheless indicates the scale of the damage investors can expect from markets around the world in the coming months.
Still, even with the U.S. dollar gaining against its global currency peers, and benchmark 10-year Treasury note yields holding at 0.64% in overnight trade, the combination of a pre-market surge for Boeing and hopes for a breakthrough in coronavirus treatment look set to provide a solid boost to the opening bell on Wall Street.
Futures contracts tied to the Dow Jones Industrial Average , which clawed its way into positive territory last night, are indicated 750 points higher at the start of trading Friday, while those linked to the S&P 500, which has risen 8.32% so far this month, are suggesting an 85 point gain for the broader benchmark.
European stocks, too, were on firm footing in early trading, with the Stoxx 600 rising 3% and Germany's trade-sensitive DAX index gaining 4.22% .
Britain's FTSE 100, meanwhile, was marked 3.4% higher in London as the pound eased to 1.2443 against a firmer U.S. dollar, underscoring investor concern that the lockdown in Europe's second-largest economy, and the hardest hit by the coronavirus outbreak, will be extended for at least another three weeks.
Global oil prices were also active in overnight trading, with U.S. crude falling to the lowest levels in nearly two decades, after OPEC economists slashed their global demand forecasts and the Energy Department said domestic producers had boosted U.S. inventories by a recod 19.2 million barrels.
Brent crude futures contracts for June delivery, the benchmark reference for around 60% of global crude purchases, gained 81 cents from their Thursday closing price in New York to change hands at $26.63 per barrel in early European trading.
WTI crude futures for May delivery, which are more tightly connected to domestic gas prices, were marked 76 cents lower at $19.11 per barrel.
Overnight in Asia, China stocks clung to hopes that the March industrial production reading signals hope for the world's second-largest economy, with solid gains helping the MSCI ex-Japan index rise 1.5% into the close of trading while Japan's Nikkei 225 surged 3.15% to close at 19,897.26 points.