Showing posts with label Futures Indicator. Show all posts
Showing posts with label Futures Indicator. Show all posts

Sep 24, 2020

US Market | Futures Indicator: Dow closes more than 500 points lower as tech pressure mounts, Apple slides 4%


Fred Imbert, Maggie Fitzgerald

Stocks fell sharply on Wednesday, adding to September’s struggles, as tech shares took another leg lower and investors fretted over uncertainty around the coronavirus pandemic and further stimulus. 

The Dow Jones Industrial Average closed 525.05 points lower, or 1.9%, at 26,763.13. Earlier in the session, the Dow was up 176 points. The S&P 500 slid 2.4% to 3,236.92 and the Nasdaq Composite pulled back by 3% to close at 10,632.99.

“Investors are being whipsawed by conflicting COVID headlines and the growth vs. cyclical debate,” said Adam Crisafulli of Vital Knowledge in a note. “The result is sentiment souring on both growth and cyclical for the moment (which obviously means stocks are for sale broadly).”

Shares of Amazon and Netflix dropped 4.1% and 4.2%, respectively, to lead Big Tech lower. Facebook slid 2.3%. Alphabet closed 3.5% lower. Apple ended the day down 4.2% and Microsoft dipped 3.3%.

Shares of Tesla fell 10.3% after Elon Musk offered new delivery predictions for 2020 and detailed a new battery design that he claims will make Tesla’s cars cheaper to produce. The stock was also under pressure after Tesla sued the U.S. government to overturn tariffs on China. 

The S&P 500 and Dow are down 7.5% and 5.9%, respectively, for the month. The Nasdaq has dropped 9.7% over that time period. Shares of Facebook, Amazon, Apple, Netflix, Alphabet and Microsoft are all down at least 11% in September. 

“This rotation out of tech and into cyclical stocks has picked up legs in September,” said Art Hogan, chief market strategist at National Securities. He added that “September is a historically tough month and this one has been a quagmire of headwinds. Today is reflective of that.”

Investors have faced a slew of headwinds this month, including a rising number of global coronavirus cases and uncertainty around new U.S. fiscal stimulus.

Earlier this week, the U.K. said it would impose stricter measures to curb the coronavirus outbreak. To be sure, President Donald Trump said the U.S. would not be implementing a second round of lockdowns. “The U.K. just shut down again. They just announced that they’re going to do a shutdown, and we’re not going to be doing that,” Trump said.

On the stimulus front, lawmakers are still struggling to move forward with a new package. Federal Reserve Chairman Jerome Powell said before Congress on Wednesday that further fiscal stimulus is still needed for the U.S. economic recovery to continue. 

“We’ve come a long way pretty quickly, and that’s great. But there’s a long way to go. So I just would say we need to stay with it, all of us. The recovery will go faster if there’s support coming both from Congress and from the Fed,” Powell said

Nike shares jumped 8.8% after the company said digital sales surged more than 80% last quarter. Earnings and sales blew past analysts expectations last quarter and the company gave a forecast for growth in the new fiscal year.

Sep 16, 2020

US Market | Futures Indicator: Stock futures climb as investors await Fed meeting


Maggie Fitzgerald

U.S. stock futures rose in early trading Wednesday as investors readied for comments from the Federal Reserve later in the day.

Dow futures implied an opening gain of more than 100 points. S&P 500 and Nasdaq 100 futures were also higher.

Better-than-expected earnings from FedEx and Adobe after the bell boosted sentiment. FedEx released a blowout quarter with earnings $2.18 per share above analyst estimates, fueled by the e-commerce boom. The shipping company rallied more than 9% in extended trading. Adobe jumped 2% after hours. 

On Tuesday, the Dow closed up marginally, after gaining more than 200 points earlier in the session. Apple shares came off their highs following the technology giant’s new product event, dragging down the 30-stock average following its new product event.

The S&P 500 climbed 0.5%, despite weakness in financials. Tuesday marked the third straight day of gains for the 500-stock index. 

Technology stocks continued their broad-based rally. The Nasdaq Composite rose 1.2%, bringing its week to date gain to more than 3%. The technology-heavy index dipped in correction territory last week and suffered its worst weekly performance since March.

Positive economic data in the U.S. and China on Tuesday boosted sentiment on Tuesday. 

“Optimism is being supported by a continual flow of good economic news, healthy earnings news and the prospect of getting more comforting news from the Federal Reserve tomorrow suggesting they remain committed to letting the recovery run hot while continuing to provide supportive policies,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. 

Wednesday marks the second day of the Federal Reserve policy’s meeting, the first since Chairman Jerome Powell unveiled a policy shift toward greater tolerance of inflation, effectively pledging to keep interest rates low for longer. Investors widely expect the central bank to maintain is downbeat stance on the economy.

The Federal Open Market Committee will provide its quarterly update on its estimates for GDP, unemployment and inflation. The central bank could provide clearer guidance on what it will take to raise rates in the future.

“The Fed doesn’t like to be involved in politics, even though it’s inherently a political institution but two months before an election is a very difficult time to put your politics aside,” David Zervos, chief market strategist at Jefferies, said on CNBC’s “Closing Bell” on Tuesday. “You just have to expect that there’s going to be some thought to politics. 

One of the hottest initial public offerings of 2020 will open for trading on Wednesday. Data storage software company Snowflake is priced at 30 times forward revenue and even got a rare vote of confidence from Berkshire Hathaway. Snowflake expects to go public at a share price between $100 and $110, according to an updated S-1 filing from Monday.

August retail sales data will be released at 8:30 a.m. on Wednesday. Analysts polled by FactSet are expecting an increase of 1.1%, compared to July’s 1.2% rise. 

Sep 15, 2020

US Market | Futures Indicator: U.S. stock futures climb, extending Monday's rally

Jesse Pound

People walk by the New York Stock Exchange (NYSE) near One World Trade Center, the Freedom Tower, in lower Manhattan during commemoration ceremonies for the September 11, 2001 terror attacks on September 11, 2020 in New York City.

People walk by the New York Stock Exchange (NYSE) near One World Trade Center, the Freedom Tower, in lower Manhattan during commemoration ceremonies for the September 11, 2001 terror attacks on September 11, 2020 in New York City.

Spencer Platt | Getty Images

U.S. stock futures ticked higher early Tuesday after the market kicked off the week with a broad-based rally. 

Dow Jones Industrial Average futures pointed to an opening gain of about 160 points. Futures tied to the Nasdaq-100 and S&P 500 also both traded in positive territory.

The move in futures follows a bounce-back session for Wall Street on Monday. Fresh off its worst week since March, the Nasdaq Composite led the way with a 1.9% gain as major tech stocks found their footing. The Dow and S&P 500 both gained more than 1% as well, with advancing stocks outnumbering declining ones nearly 5-to-1 on the New York Stock Exchange. 

Sentiment was boosted on Monday by positive news on the vaccine front, with AstraZeneca resuming its phase three trial in the United Kingdom and Pfizer CEO Albert Bourla saying over the weekend the company should be able to present key data from its trial to regulators by the end of October

Optimism about the United States getting a better handle on the virus was a major reason that LPL Financial raised its year-end target for the S&P 500 to a range of 3,450–3,500 on Monday, said Jeff Buchbinder, an equity strategist at the firm. That target implies an upside of roughly 2% for the market over the rest of the year.

Buchbinder said that Monday’s rally was also fueled by the announcement of major deals in the tech space, including Nvidia’s move to buy Arm Holdings from Softbank for roughly $40 billion

“Regardless of the situation, regardless of the sector, big commitments and big mergers tend to show confidence, and we would take those as positive signs,” Buchbinder said. 

The tech sector could generate more market-moving headlines on Wednesday, with Apple expected to announce new products at a digital-only event. The company is not expected to release a new iPhone, however. 

The strong session followed a slide for tech stocks in recent weeks that brought the Nasdaq Composite into a correction, which means that the index fell more than 10% below its record high.

Aug 12, 2020

US Market | Futures Indicator: Stock futures point to a rebound after S&P 500 snaps 7-day winning streak, Dow futures up 270

Maggie Fitzgerald

U.S. stock futures rose and pointed to a rebound at the open on Wednesday after the S&P 500 closed lower for the first time in eight days.
Dow futures were higher by 280 points, or 1%. S&P 500 futures added 0.8%. Nasdaq-100 futures were higher by 0.9%. The S&P 500 flirted with an all-time high on Tuesday before a late-day sell-off led by tech shares knocked the benchmark down. The S&P 500 is 1.8% from its February record.
After the bell on Tuesday, President Donald Trump said the U.S. government will purchase 100 million doses of Moderna's experimental coronavirus vaccine, which is currently in late-stage human trials.
 Vaccine hopes lifted shares of cruise lines and airlines in premarket trading Wednesday. Carnival and United shares each rose 2% in premarket trading.
A return of risk appetite following encouraging economic numbers and hopes of new coronavirus relief package and even a vaccine boosted the 500-stock index for much of the trading day on Tuesday.  However, the S&P 500 ended the day down 0.8% — snapping a seven-day winning streak — as technology stocks dropped.
The S&P 500 has rallied more than 52% since its March low.
Key tech shares were rebounding Wednesday morning. Apple and Microsoft were up 1% in the premarket.
"A combination of the S&P 500 Index making its first real attempt at an all-time record high after seven straight days of advances, its old leadership — technology and FANNGs — continuing a recent trend of struggling and another day without an agreement nor even renewed talks in DC regarding a new stimulus package finally caught up with the stock market," Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. "The first signs of trouble today brought a lot of selling by investors anxious to lock-in recent gains."
Investors are also juggling uncertainty over a second coronavirus stimulus bill. Over the weekend, Trump signed four executive orders to extend some coronavirus aid. Treasury Secretary Steven Mnuchin said Monday the White House is open to resuming coronavirus aid talks with Democrats and putting more relief money on the table to reach a compromise.
The Labor Department is set to release key inflation data on Wednesday at 8:30 a.m. ET. Economists polled by Dow Jones are expecting the consumer price index  to increase 0.3% in July, after jumping 0.6% in June. Core CPI is expected to rise by  0.2%, or 1.2%  on an annualized basis, according to Dow Jones.
Earnings seasons continues on Wednesday with Cisco Systems, Lyft and SmileDirectClub all reporting after the closing bell.
On Tuesday, former Vice President and presidential candidate Joe Biden announced Sen. Kamala Harris of California will join him on the Democratic ticket.

Jun 24, 2020

US Market | Futures Indicator: Stock futures fall after Nasdaq Composite notches new record

Thomas Franck

Futures contracts tied to the major U.S. stock indexes pointed to a slightly lower open on Wednesday, following a largely positive day on Wall Street in the previous session.

Dow Jones Industrial Average futures dipped 251 points, suggesting an opening loss of about 255 points when regular trading resumes on Wednesday. S&P 500 and Nasdaq-100 futures also pointed to a slightly lower start for the two indexes at the Wednesday open.

On Tuesday, the Dow closed 131.14 points higher as Apple, UnitedHealth and Visa led the blue-chip index higher. The S&P 500 gained 0.4% to end the day at 3,131.29.

The Nasdaq Composite, meanwhile, advanced 0.74% to 10,131.37, its 21st closing record for 2020. The Nasdaq’s gain on Tuesday also represented its eighth straight day of gains, its longest winning streak since December, when it advanced for 11 straight sessions. 
Shares of consumer technology company Apple rose 2.1% on Tuesday to reach a new all-time high, notching the benchmark one day after it unveiled new operating systems for its iPhone and computers. Apple pleased its investors further by announcing it will phase one Intel chips in favor of its own products when building new Mac devices.

Investors also kept a close eye on comments from White House health advisor Dr. Anthony Fauci, who on Tuesday said the U.S. is seeing a “disturbing” surge in new Covid-19 cases. Fauci, the director of the National Institute of Allergy and Infectious Diseases, also struck a more upbeat tone on a vaccine potential and said he expects one by early 2021.

Tuesday’s gains during regular trading followed a more turbulent overnight session after conflicting signals from the Trump administration on its landmark trade deal with China. Trump trade advisor Peter Navarro triggered confusion Monday evening after saying in an interview that the deal was “over.”

President Donald Trump then tweeted that the accord was “fully intact” and said he hoped Beijing would live up to its agreements in the deal.
The about-face from the White House highlighted the fragility of the accord struck between the globe’s two largest economies earlier this year. Tensions have been rising between the U.S. and China in recent months over the origins of the coronavirus pandemic and Beijing’s influence over Hong Kong.

Jun 9, 2020

US Market | Futures Indicator Update: Dow futures drop 300 points as comeback rally pauses, Airlines and other reopening plays decline

Fred Imbert,Thomas Franck

Stock futures fell on Tuesday as investors took some money off the table following a relentless comeback rally that pushed the S&P 500 into positive territory for the year amid a recession from the coronavirus pandemic.
Dow Jones Industrial Average futures lost 306 points, or 1.1%. The move suggested an opening decline of 330 points. S&P 500 futures lost 0.9%. Nasdaq-100 futures dropped 0.5%.
The speculative trades that have led the latest leg of the market’s comeback on optimism about the reopening of the economy were lower in early trading Tuesday. United Airlines, Delta Air Lines each dropped more than 6% in premarket trading. Cruise lines Carnival and Royal Caribbean declined more than 5%. Retail-related trades Gap and Simon Property Group dropped as well.
The moves early Tuesday followed sharp gains on Wall Street a day earlier, with the S&P 500 returning to positive territory for 2020 as fears over the coronavirus continued to give way to optimism about the reopening of the American economy.
The S&P 500 leaped 1.2%, or 38.46 points, to 3,232.39 during Monday’s regular session and turned positive for the year in a quick about-face following the springtime fears over the virus. The broad market index is now more than 47% off its March low. At one point this year, the S&P 500 was down more than 30% from its all-time highs. It’s now positive for 2020 by 0.05%.
The Nasdaq Composite gained 1.1% on Monday and hit its own fresh high, bringing its year-to-date advance to 10.6%. The Dow Jones Industrial Average, meanwhile, added 461 points, or 1.7%, trimming its year-to-date losses to just 3.3%.
“Equities continue to trend higher in anticipation of improving economic conditions,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. “But I think it’s premature to declare happy days are here again.”
“What gives us caution is the duration of Covid-19 remains unknown,” said Sandven. “We don’t have treatments, we don’t have prevention and we’re a little bit at the mercy of how fast the virus spreads.”
The gains came Monday even as the official economic arbiter in the U.S. declared that the economy entered a recession earlier this year. The National Bureau of Economic Research determined that a “clear peak in monthly economic activity” occurred in February.
Traders say the market’s hot streak over the last two months is in large part thanks to confidence about the reopening of the U.S. economy and a barrage of government stimulus.
“Recent data points like the jobs report and not-as-bad-as-feared company updates have fueled the view that the worst of the declines could be behind us,” a team of RBC Capital Markets analysts told clients Monday. “The risk-on trade really is gaining traction. Valuations have spiked to historical highs in many industrial sub-sectors, signaling a strong recovery is potentially taking hold.”
Market optimists pointed to improving economic signals for the most recent rallies, including the government’s far-better-than-expected jobs report last week. The Labor Department said Friday the economy added 2.5 million jobs in May, a record. Economists polled by Dow Jones had forecast a drop of more than 8 million.
But some investors are starting to wonder whether the move as gone too far, too fast considering the economy as just started to reopen. The Federal Reserve begins a two-day meeting Tuesday.
All in, the S&P 500 is up 47% from its March low. Much of those gains have been thanks to the so-called reopening trade, those stock that would benefit the most if all the Covid-19 precations and business closures were removed.
Airline shares, which swooned in March amid travel restrictions and contagion fears, have been one of strongest groups of late. Delta, United and American Airlines are up 62.7%, 91.5% and 100.3% over the last month alone. Another “reopening” group, cruise line operators Carnival and Norwegian Cruise Line are up 75.3% and 116% over the same period.
Job openings data and small-business optimism numbers await investors on Tuesday while companies ChewyGameStop and Tiffany are slated to reported quarterly earnings.

Jun 2, 2020

US Market | Futures Indicator: Stock futures little changed as investors assess economy reopening amid civil unrest

Yun Li

U.S. stock futures were little changed in early morning trading on Tuesday as investors grappled with civil unrest around the country as states try to reopen the economy from the coronavirus pandemic.
Futures on the Dow Jones Industrial Average traded 41 points lower, implying a Tuesday opening decline of around 25 points. S&P 500 and Nasdaq 100 also pointed to a largely flat Tuesday start for the two indexes.
In a last-minute address from the White House Monday evening, President Donald Trump said he will deploy the military if states and cities failed to quell the demonstrations. Futures fell as Trump spoke.
“I am mobilizing all federal and local resources, civilian and military, to protect the rights of law abiding Americans,” Trump said. “If a city or state refuses to take the actions necessary to defend the life and property of their residents, then I will deploy the United States military and quickly solve the problem for them.”
The stock market has largely ignored the unrest until now, but that could change if investors believe the protests would continue through the summer, disrupting states plans to reopen and hurting consumer confidence.
“Good news on vaccines helped stocks in May, but US-China relations & civil unrest could steal the spotlight in June,” Lori Calvasina, RBC’s chief U.S. equity strategist, said in a note. “The S&P 500 remains highly news flow driven.”
New York Gov. Andrew Cuomo announced New York City will be under curfew Monday night starting at 11 p.m. and lasting until 5 a.m. Tuesday to curb protests. Similar curfews were instituted in cities across the country in an effort to dissolve mass gatherings.
The market rose slightly on the first day of June following back-to-back monthly gains. The Dow rose about 90 points on Monday after a 4.2% gain in May and a 11% rally in April. Meanwhile, the S&P 500 climbed about 0.3% after gaining 4.5% in May and 12.6% the month before.
Investors continued to focus on the progress of economic reopenings, bidding up shares of airlines, retailers and cruise line operators. However, many on Wall Street grew worried that rising risks of the racial strife and U.S.-China tensions could reverse the market’s massive comeback.
Tensions with China continued to simmer as the country asked state-owned firms to halt purchases of soybeans and pork from the U.S., Reuters reported Monday. The move came after Trump said he would take steps to revoke Hong Kong’s favored trade status, in response to a controversial new security law passed by China’s parliament.
“The disconnect between stocks and the economy generated widespread concern among some investors,” Jeff Buchbinder, equity strategist for LPL Financial, said in a note. “At the same time, reopening optimism and massive stimulus overshadowed some concerns about a second wave of COVID-19 infections and increasing US-China tensions.”
As of Monday, the S&P 500 has bounced about 39% off its March low, sitting about 10% below its record high set in February. 

Apr 21, 2020

US Market | Futures Indicator: Dow futures point to opening drop of more than 200 points

Yun Li

Stock futures pointed to losses in early morning trading Tuesday as oil prices remained under pressure following an unprecedented wipeout a day earlier.
Futures on the Dow Jones Industrial Average fell 227 points, implying an opening drop of about 278 points. S&P 500 futures and Nasdaq futures also pointed to lower Tuesday opens for the indexes.
Earlier in the session, Dow futures had briefly pointed to an opening decline of about 350 points.
The more actively-traded June oil contract shed earlier gains and fell about 1%. The May contract, which triggered Monday’s stock sell-off with a bizarre move below zero into negative prices, also shed earlier gains and returned to negative territory.
IBM slipped 3.08% in extended trading after the company reported a 3.4% decline in revenue in the first quarter from a year ago amid the spread of coronavirus. Coca-Cola, Netflix and Chipotle are on deck to report earnings on Tuesday.
Stocks dropped on Monday to start another likely volatile week, with the Dow falling nearly 600 points, as an unprecedented plunge in oil prices weighed on investor sentiment. West Texas Intermediate crude for May delivery fell more than 100% to settle at negative $37.63 per barrel, highlighting just how much demand has collapsed due to the coronavirus pandemic.
Still, the international benchmark Brent crude and the June WTI contract both were still above $20 per barrel. The June contract, which fell 18% to settle at $20.43 on Monday, is a better reflection of the reality in the oil market.
Late Monday, President Donald Trump said he would sign an executive order to temporarily suspend immigration  to the United States to protect jobs “in light of the attack from the Invisible Enemy.” Millions of Americans have filed for unemployment benefits as the coronavirus pandemic shuts down economic activity in much of the country.
Trump’s tweet did not provide specifics on what the order would entail.
Earlier Monday, the Senate failed to reach a deal on the next package to rescue an economy and health care system ravaged by the global pandemic. However, a vote is set up as soon as Tuesday afternoon to replenish a key small business aid program.
Investors continued to monitor the coronavirus pandemic and the country’s plan to reopen the economy. Signs have emerged that New York is past the worst of its outbreak. Georgia on Monday rolled out aggressive plans to reopen the state’s economy, calling for many businesses to reopen their doors as early as Friday.
Stocks enjoyed their first back-to-back weekly gains since early February as investors grew more optimistic that the pandemic is easing off. The S&P 500 is now about 17% from its record high on Feb. 19, cutting about half of its losses during the coronavirus sell-off.
“Market volatility remains intense, as subtle changes in the tone of the news drives dramatic shifts in investor sentiment,” said Mark Hackett, Nationwide’s chief of investment research. “Markets rallied sharply last week on hope that the worst of the outbreak is behind us. This optimism is likely to face headwinds, as the reopening of the economy is heading for an intense debate.”

Apr 2, 2020

US Market | Futures Indicator: Stock futures point to Thursday opening bounce on Wall Street after second quarter's rocky start

Pippa Stevens

U.S. stock futures rose in early morning trade on Thursday and pointed to gains at the day’s open, as markets try to rebound after kicking off the second quarter in the red.
Dow futures rose 398 points, indicating a gain of about 331 points at the open on Thursday. The S&P 500 and Nasdaq Composite were also set to open modestly higher.
Stocks posted steep losses on Wednesday to begin the second quarter, as the coronavirus outbreak continues to wreak havoc on global markets.
The Dow Jones Industrial Average closed 4.4%, or 973.65 points, lower at 20,943.51. The S&P 500 and Nasdaq Composite also closed 4.4% lower, at 2,470.50 and 7,360.58, respectively. Stock losses accelerated minutes before the close, although the major averages did manage to end the session off the lows of the day. The Dow briefly fell more than 1,100 points.
The utilities, real estate and financials sectors dragged the S&P 500 lower, while Boeing and American Express were the Dow’s biggest underperformers, falling 12% and 9%, respectively.
New York Gov. Andrew Cuomo said Wednesday he is closing all New York City playgrounds, and said that the state’s model projects a high death rate through July. He also said cases in New York state now total more than 83,000.
His comments came after President Donald Trump said Tuesday evening that the U.S. should prepare for a “very, very painful two weeks.” White House officials are projecting between 100,000 and 240,000 virus deaths in the U.S.
The coronavirus outbreak, which sent global markets tumbling in the first quarter, continues to act as a headwind for the market as investors grapple with the ongoing uncertainty around how long the economy will be closed.
“While April will be an extremely volatile month in terms of both the news flow and stock market reactions, I do think many are anticipating this,” Bleakley Advisory Group chief investment officer Peter Boockvar said Wednesday. “What is not priced in I believe because it’s obviously hugely unknown is what is on the other end come May. How contained will this virus spread be by then? To what extent will things begin to reopen, if at all?”
On Tuesday, the Dow and S&P 500 closed out their worst first-quarter performances of all time. The Dow fell more than 23% in the first quarter; that was also its biggest quarterly fall since 1987. The S&P 500 fell 20% in the first quarter, its biggest quarterly loss since 2008.
“While we have not seen announcements yet, dividend cuts could be on the horizon for U.S. companies,” said New York Life Investments multi-asset portfolio strategist Lauren Goodwin.
“With a heavy hit to revenues, businesses may opt to prioritize employees and lower borrowing loads over paying dividends. This could present a risk for equities. Announcements of temporary (1-2 quarters) of dividend cuts could be priced in, but longer cuts would likely contribute to negative sentiment,” she added.
Amid the market rout, Congress passed a massive $2 trillion stimulus package in an effort to halt the economic slowdown caused by the pandemic. Already, there are calls for even more stimulus.
Boston Federal Reserve President Eric Rosengren said Wednesday that Congress likely will have to deliver more stimulus to help those at the lower end of the economic spectrum and to boost small business.
Unemployment is likely to “rise pretty dramatically over the next couple of months” and the economic damage won’t abate until the coronavirus is brought under control, he said. “I don’t think we’ll turn a corner until people feel comfortable taking mass transit again,” he said.
- CNBC’s Jeffrey Cox and Nate Rattner contributed reporting

Mar 31, 2020

US Market | Futures Indicator: Stock futures positive again in choppy trade, building on market's rebound from massive coronavirus sell-off

Yun Li

Stock futures were positive in choppy trading early Tuesday morning, following the market's rebound from its deep rout triggered by the coronavirus pandemic.
At 4:35 a.m. ET, futures on the Dow Jones Industrial Average were 162 points higher, pointing to an implied opening rise of more than 136 points at Tuesday's open. S&P 500 futures and Nasdaq-100 futures also pointed to opening gains for the two indexes.
Earlier, futures had pointed to opening losses for the three indexes.
The overnight action followed a strong session on Wall Street, with the Dow jumping nearly 700 points led by an 8% pop in Johnson & Johnson after it announced a vaccine candidate for the coronavirus. The S&P 500 rallied 3.4%.
Investors embraced a more realistic government approach to contain the pandemic. President Donald Trump extended the timeline for social distancing guidelines to April 30, which many believe will reduce economic damage in the long run.
"I think the market has established some type of bottom," Tom Lee, head of research at Fundstrat Global Advisors, said on CNBC's Markets in Turmoil Special on Monday. "I don't know if this is October '08 here; We still have some wood to chop."
Stocks have managed to rally on concerning economic data including last week's record number of jobless claims and Monday's worse-than-expected manufacturing reading from the Dallas Fed, Lee noted.
"If we are rallying on bad news, I think that's a sign that we are probably at a bottom," Lee said.
The market also built on last week's historic rally, where the Dow and S&P 500 posted their best three-day win streaks since the 1930s. With Monday's gains, the Dow is now up 20% from its coronavirus sell-off low reached on March 23 while the S&P 500 has risen more than 17% from those levels. 
Still, the consensus on Wall Street calls for more selling before the market can hit a bottom. Historically, Bear markets are often punctuated by sharp bounces on their way down to a trough.
"Last week's double-digit gain for markets was a welcome relief rally, though market bottoms are rarely as clean as this one has been," said Mark Hackett, Nationwide's chief of investment research. "Markets will need to reflect more traditional interactions before confidence in a bottom can be reached."
Investors continued to grapple with the worsening outbreak in the U.S. as the confirmed cases rose to more than 153,200, according to data from Johns Hopkins University. The U.S. has also officially become the country most affected. Trump said Sunday he hopes the country will "be well on our way to recovery" by June 1.
"We anticipate that market volatility will resist until liquidity, credit, and health risks have demonstrably passed," said Lauren Goodwin, economist and portfolio strategist at New York Life Investments. "With major policy stimulus now in place in the U.S., we expect grim health and social news to dominate the next couple of weeks."

Mar 30, 2020

US Market | Futures Indicator: Futures return to negative territory as investors brace for another volatile week

Fred Imbert

RT: Coronavirus, US Wall Street 200306
A person wearing a face mask walks along Wall Street after further cases of coronavirus were confirmed in New York, March 6, 2020.
Andrew Kelly | Reuters

U.S. stock futures shed gains to fall back into negative territory early Monday morning in volatile trading after last week’s sharp gains, even as the number of coronavirus cases in the U.S. continues to rise at an alarming rate.
At around 3:19 a.m. ET, Dow Jones Industrial Average futures were down 89 points, pointing to an implied fall of about 161.78 points at the Monday open. S&P 500 futures and Nasdaq 100 futures also pointed to a lower open for the two indexes on Monday. The moves came as crude prices fell sharply. Earlier, futures made a recovery to point to Monday opening gains.
The Dow last week posted its biggest weekly gain since 1938, surging more than 12%. The S&P 500 and Nasdaq are coming off their best week since 2009, after rising 10.3% and 9.1%, respectively. To be sure, it was a volatile ride for investors. The S&P 500 posted daily swings of at least 2.9% in four of the five sessions. That includes a 3.4% drop on Friday for the S&P 500.
The sharp gains last week were sparked in part by the prospect of massive fiscal and monetary stimulus. President Donald Trump signed into law Friday a $2 trillion stimulus package that includes direct payments to curb the economic blow from the outbreak. The Federal Reserve also launched a series of measures to sustain the economy, including an open-ended asset-purchase program.
“Bulls staged an epic comeback,” said Ken Berman, strategist at Gorilla Trades. “Despite the rally … the uncertainty regarding the length of the necessary, but economically damaging global lockdowns continues to weigh on risk assets.”
“The technical picture continues to be bearish across the board, despite the mid-week surge in stocks, with all of the key trend indicators still pointing lower,” said Berman, noting the major averages are still below their respective moving-day averages even after last week’s strong gains.
Coronavirus cases around the world are still climbing, adding to the uncertainty over when lockdown and quarantine measures will be removed and the economy can return to normal.
Data compiled by Johns Hopkins University shows more than 713,000 coronavirus cases have been confirmed globally. The U.S. overtook Italy and China last week as the country with the most cases with over 136,000. Nearly half of all U.S. cases come from New York, where more than 59,000 people have been infected.
“Equity markets are overextended, but face a bumpy period of even grimmer virus news and poor economic statistics in the next 1-2 months,” strategists at MRB Partners wrote in a note. “The world is now entering a third phase, the first being the shock of an out-of-control virus spreading around the globe, then the massive policy response, and now the economic fallout phase has arrived and will test investors’ very fragile confidence.”
Investors got a glimpse of the virus’ economic impact last week. On Thursday, the Labor Department reported a record 3.28 million workers filed for unemployment benefits the week of March 20. That number easily topped the previous record of 695,000 set in 1982. U.S. consumer sentiment also fell to its lowest level in more than three years.
To be sure, the market has also flashed some signals of a potential bottom. The confidence spread between the so-called smart money — large institutions — and dumb money, retail investors, sits squarely in positive territory after dropping to extremely low levels. Meanwhile, insider buying reached an 11-year high.
President Donald Trump also extended at a news conference Sunday the national social distancing guidelines to April 30 and said the death rate would peak in two weeks.
— CNBC’s Eustance Huang contributed to this report.

Mar 27, 2020

US Market | Futures Indicator: Dow futures point to 500 point drop at the open following a massive 3-day rally

Fred Imbert

GP: NYSE Wall Street Markets Plunge
People walk by the New York Stock Exchange (NYSE) on March 09, 2020 in New York City.
Spencer Platt | Getty Images
U.S. stock futures were pointing lower Friday following a sharp rally sparked by increasing expectations of massive fiscal stimulus while investors shook off grim unemployment data.
Around 6 a.m. ET Friday, Dow Jones Industrial Average futures implied an opening drop of more than 500 points. S&P 500 and Nasdaq 100 futures also pointed to declines at the open. Dow futures briefly traded more than 100 points higher shortly after the 6 p.m. open.
The Dow rallied more than 1,300 earlier on Thursday, or 6.4%, to cap off its biggest three-day gain since 1931. The 30-stock average is now up more than 20% over the past three sessions. The S&P 500 also rallied more than 6% and is now up over 20% since Monday’s close as well.
Stocks got a boost after the Senate passed a $2 trillion economic stimulus bill aimed at mitigating the economic damage from the coronavirus outbreak. House Speaker Nancy Pelosi, D-Calif., said the bill will be passed “with strong bipartisan support.” The House is expected to vote on the bill later today.
Comments from Federal Reserve Chairman Jerome Powell also gave stocks a boost Thursday.
We still have policy room in other dimensions to support the economy,” Powell said on NBC’s “TODAY” show. “We’re trying to create a bridge from a very strong economy to another place of economic strength.”
A massive spike in weekly jobless claims could not halt the market’s blistering run higher on Thursday. The Labor Department reported that jobless benefit claims had soared to 3.28 million last week, easily eclipsing the previous record of 695,000.
Thursday’s rally put the Dow and S&P 500 on pace for their best weekly performances since the 1930s. However, some traders worry about the sustainability of this surge.
“Even though equities were squeezed higher into the close, credit markets continue to diverge substantially,” said Ken Berman, strategist at Gorilla Trades. “You could almost smell the burning shorts on Wall Street [Thursday], but as credit spreads remain wide, one has to wonder how much ‘real’ buying is behind this week moves, besides the bailout-induced short-covering.”
Gregory Faranello, head of U.S. rates trading at AmeriVet Securities, said he’s taking the surge in equities with a grain of salt.
“I wouldn’t necessarily take the price action in the risk markets right now to be a true reflection that this is over,” he said. “This is going to be an economic fallout. We’re seeing in two weeks what we would normally see maybe in a year and a half or two years.”
The number of global coronavirus cases has risen to more than 510,000, according to data from Johns Hopkins University. In the U.S. alone, more than 75,000 cases have been confirmed.

Mar 26, 2020

US Market | Futures Indicator: Dow futures set to drop 300 points at the open ahead of unemployment report

Pippa Stevens, Eustance Huang

U.S. stock futures fell early Thursday morning trading as investors looked ahead to the national weekly initial jobless claims data expected later in the day.
Dow futures indicated an opening drop of more than 300 points at Thursday’s open. S&P 500 futures and Nasdaq-100 futures also pointed to opening losses.
The moves came after the Senate unanimously approved a $2 trillion economic relief package late Wednesday, which aims to cushion the blow from the coronavirus outbreak. The stimulus bill now heads to the House, which will push to pass it by voice vote Friday morning as most representatives are out of Washington.
The Senate rushed to pass the bill as data is expected to show a massive spike in unemployment claims after businesses shuttered to try to slow the outbreak’s spread.
National weekly initial jobless claims data are expected to be out around 8:30 a.m. ET. Street strategists are projecting record-shattering numbers. Citi is the most bearish, with estimates of roughly 4 million claims.
On Wednesday California Gov. Gavin Newsom said that the state has seen 1 million unemployment claims in less than two weeks as the pandemic has led to businesses being shut down across the state.
“What investors really need to gain confidence into repositioning for growth is data that suggests the outlook for risks for the coronavirus itself are improving,” Todd Jablonski, chief investment officer of Principal Portfolio Strategies at Principal Global Investors, told CNBC’s “Street Signs Asia” on Thursday morning Singapore time.
“I think it’s key to not apply pre-crisis fundamentals against post-crisis prices to try to determine where value sits,” Jablonski said.
On Wednesday, the Dow climbed more than 2%, or 495.64 points to close at 21,200.55. Boeing and Nike fueled the 30-stock index, rising 24% and 9%, respectively. The S&P 500 also registered a gain, climbing 1.1%. The Nasdaq Composite was the relative underperformer, dipping 0.5% as Facebook, Amazon, Apple, Netflix and Google-parent Alphabet all closed lower.
Stocks rallied for much of the day after the White House and Senate agreed on a $2 trillion coronavirus stimulus bill early Wednesday morning. But a tweet from Sen. Bernie Sanders coming late in the day suggested the bill could hit a few snags before a final vote. That sent stocks tumbling from their session highs. Before the tweet, around 3:30 p.m. ET, the Dow had been up 1,315 points, or 6.35%, while the S&P rose as much as 5.07%.
Wednesday’s gains extended Tuesday’s historic rally, which saw the Dow register its best day since 1933 and post its largest single-day point gain in history. Tuesday was the S&P 500′s best day since 2008.
In what’s been a bout of extreme volatility for the market, this was the first time the indexes managed to post back-to-back gains since February.
“It was great to see the stock market finally rally for a second day in a row, but late day ‘fade’ was obviously disappointing,” said Miller Tabak chief market strategist Matt Maley. “As disappointing as the late day decline was, it merely confirmed what we already knew ... bottoms after severe declines in the stock market are formed in a ‘process’ and are rarely V-shaped,” he added.
Despite the gains, the major averages still have a lot of ground to make up for before returning to record highs. The S&P 500 is 27% below its February all-time high, while the Dow is trading 28.3% below its record. 
The Federal Reserve has stepped in in an effort to shore up the economy as the coronavirus outbreak and subsequent business slowdown continues to wreak havoc on global markets. Among other things, the central bank has slashed interest rates to near zero and announced an unprecedented quantitative easing program.
Former Fed Chairman Ben Bernanke said Wednesday that current Chairman Powell has been “extremely proactive,” while noting that markets could still be in for steeper declines ahead.
“It is possible there’s going to be a very sharp, short, I hope short, recession in the next quarter because everything is shutting down of course,” he said on CNBC’s “Squawk Box.” But he did sound an optimistic note, saying that there could also be a “fairly quick rebound.”
—CNBC’s Jacob Pramuk contributed reporting.

Mar 25, 2020

US Market | Futures Indicator: Stock futures turn negative even after White House, Senate reach deal on coronavirus stimulus bill

Fred Imbert, Yun Li, Eustance Huang

Stock futures turned negative in early Wednesday morning trading, following Tuesday’s historic rally, despite the White House and Senate reaching a deal on a coronavirus stimulus bill.
Around 7 a.m. ET, futures on the Dow Jones Industrial Average were down 127 points, or 0.6%. S&P 500 and Nasdaq 100 futures were down 0.9% and 0.8%, respectively. Dow futures were up more than 800 points at one point in the overnight session.
The moves came after the White House and Senate leaders agreed on a massive $2 trillion coronavirus stimulus bill.
“At last we have a deal,” Republican Senate Majority Leader Mitch McConnell said around 1:37 a.m. ET from the floor of the Senate. “In effect, this is a war-time level of investment into our nation.”
Democratic Senate Minority Leader Chuck Schumer said, “This is not a moment of celebration but one of necessity.”
Ahead of the news, Dow futures had pointed to an opening drop of about 200 points, while S&P 500 and Nasdaq-100 futures also pointed to losses at the Wednesday open.
The action in the futures market followed an epic comeback on Wall Street. The Dow soared more than 2,100 points, or over 11%, notching its biggest one-day percentage gain since 1933 and its best point increase ever. The S&P 500 rallied 9.4% for its best day since October 2008. 
Even with Tuesday’s massive rebound, some on Wall Street struggle to see the light at the end of the tunnel, especially without a clear sign that the coronavirus outbreak will be contained soon.
“This was a one-day bull market,” CNBC’s Jim Cramer said on “Closing Bell” on Tuesday. “You had stocks that moved so much they basically moved as if the second half of the year is going to be good. I struggle to find out why the second half of the year should be good ...I hate this kind of rally. This was a machine-driven rally, just like the sell-offs … I want to wait to see.”
Last week, the Cboe Volatility Index (VIX), also known as Wall Street’s fear gauge, eclipsed its financial crisis high and closed at 82.69. As of Wednesday morning, it was still hovering around a still-high 60 level.
Meanwhile, the coronavirus cases in the U.S. and globally still haven’t shown a sign of peaking. More than 400,000 cases have been confirmed worldwide, including over 50,000 in the U.S., according to Johns Hopkins University. So far, more than 600 deaths related to the coronavirus have been confirmed in the U.S. New York City reported nearly 15,000 cases Tuesday and 131 related deaths.
Some investors believed the stock market was overdue for a big bounce, having priced in a worst-case scenario regarding the economic damage being done by coronavirus-related shutdowns. They believe a bounce could occur here even as coronavirus cases continue to surge because the market was so oversold.
—CNBC’s Jesse Pound contributed reporting.

Mar 24, 2020

US Markets | Futures Indicator: Dow futures rise nearly 900 points as Senate haggles over virus bill

Thomas Franck

GP: Capitol building Washington 200121
Commuters move past the U.S. Capitol Dome during the first evening of President Donald Trump’s impeachment trial January 21, 2020 in Washington, DC. Senators are expected to vote on the rules for the impeachment trial, which is expected to last three to five weeks.
Chip Somodevilla | Getty Images

Futures contracts tied to the major U.S. stock indexes posted a solid rise in early Tuesday morning trade.
As of 5:15 a.m ET., Dow Jones Industrial Average futures implied an opening gain of nearly 900 points. S&P 500 and Nasdaq futures also pointed to opening gains.
The overnight moves followed yet another stormy day on Wall Street on Wednesday as investors swung back to pessimism and pushed the major indexes to new multiyear lows.
The Dow dropped 582.05 points, or 3%, on Monday and remained on pace to clinch its worst calendar month since 1931. The S&P 500 dropped 2.9% to 2,237 and closed 34% below a record set last month as both indexes sank further into bear markets amid the COVID-19 outbreak.
Earlier in Monday’s session, a bill that would authorize giant fiscal spending to stimulate the economy failed to clear a key procedural hurdle. The Senate disagreement came despite Treasury Secretary Steven Mnuchin’s optimism to CNBC’s Jim Cramer that Congress was “very close” to getting a fiscal package done, noting it must be pushed forward “today.”
“We’re using some of the funds we have, but we need Congress to approve additional funds today so that we can move forward and support American workers and the American economy,” Mnuchin said.
Senate Minority Leader Chuck Schumer, D-NY, said Monday afternoon after the second failure that he and Mnuchin would meet again to try and work out a deal over the course of Monday night.
Democrats have criticized the $500 billion fund that the Republican proposal sets aside for distressed businesses, calling it a bailout fund “with no strings attached.”
Two Senate aides told CNBC that there will be no more Senate votes Monday as negotiations continue.
“I think the limit of time as to how long these negotiations will go on, will be set by the initial unemployment claims that come out on Thursday,” Steven Ricchiuto, chief U.S. economist at Mizuho Securities, told CNBC’s “Squawk Box Asia” on Tuesday morning Singapore time.
“I don’t think there’s any representative in the House or in the Senate who’s gonna be willing to sit back and debate a lot of issues and political talking points when you have what could be essentially as many as 3 million people filing for unemployment insurance,” Ricchuito said.
Helping to keep Monday’s losses in check was an announcement from the Federal Reserve, which said it would embark on an open-ended asset purchase program. The central bank said the program will run in the “amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.”
The spread of the coronavirus also forced the New York Stock Exchange to conduct its first day of fully electronic trading. The exchange said last week that two people tested positive for the disease at screenings it conducted this week.
—CNBC’s Eustance Huang contributed to this report.

Mar 23, 2020

US Market | Futures Indicator: Dow futures drop more than 700 points, briefly hit 'limit down' as investors await a stimulus agreement

Fred Imbert

GP: NYSE Closes Trading Floor, Moves To Fully Electronic Trading Amid Coronavirus Pandemic - 106455161
Traders, some in medical masks, work on the floor of the New York Stock Exchange (NYSE) on March 20, 2020 in New York City. Trading on the floor will temporarily become fully electronic starting on Monday to protect employees from spreading the coronavirus. The Dow fell over 500 points on Friday as investors continue to show concerns over COVID-19.
Spencer Platt | Getty Images

U.S. stock futures plunged again early Monday morning as Wall Street waits on Washington to agree to an economic stimulus and rescue plan to cushion blow from the coronavirus outbreak.
As of 5:00 a.m. ET, Dow Jones Industrial Average futures fell more than 700 points, pointing to a Monday opening loss of around 710 points. S&P 500 and Nasdaq-100 futures also pointed to losses at the Monday open.
Earlier in the session, futures hit their “limit down” levels, falling 5%. Downside limits to futures contracts are implemented to ensure orderly market behavior once trading hits a certain threshold. No trades below that level are allowed.
A fiscal stimulus bill failed a key procedural Senate vote Sunday as Democrats warned the measure did not do enough to help workers and too much to bail out companies. Earlier, House Speaker Nancy Pelosi had signaled she was not on board with the Republican-version of the stimulus plan, saying: “From my standpoint, we’re apart.”
However, Senate Minority Leader Chuck Schumer, D-NY, said disagreements over the bill could be overcome in the next 24 hours. A spokesman for Schumer later added the senator and Treasury Secretary Steven Mnuchin had a “productive meeting.”
National Economic Council Director Larry Kudlow said Saturday an economic stimulus package will total more than $2 trillion, noting it will be equal to roughly 10% of U.S. economic output. Last week, President Donald Trump signed a $100 billion bill that expanded paid leave in the U.S.
Mnuchin said Sunday that financing programs to stimulate the economy could be worth $4 trillion, noting these efforts will include coordination with the Federal Reserve to provide businesses with necessary liquidity.
“When this started, this was a bit unique to the airline industry since we had shut down most of airline travel,” Mnuchin said. “This liquidity facility is a broad-based liquidity facility working with the Fed.”
David Kostin, chief U.S. equity strategist at Goldman Sachs, said the difference between a fast or a prolonged recovery in the stock market will come down to three factors: How quickly the virus is contained, whether businesses will have ” access to enough capital and liquidity to last the 90 to 180 days,” and whether fiscal stimulus can stabilize growth forecasts.
“If short-term shutdowns lead to business defaults, closures, and permanent layoffs, the damage to corporate earnings growth could persist well after the virus is contained,” Kostin said in a note.
Wall Street has been clamoring for fiscal economic relief as the number of coronavirus cases keep surging. The number of confirmed global cases surpassed 300,000 over the weekend as deaths now total over 13,000, according to data from Johns Hopkins University.
In the U.S., more than 30,000 cases have now been confirmed. New York Gov. Andrew Cuomo said Sunday cases in the state soared to 15,168 over the weekend. That’s more than in France or South Korea.
The outbreak has led the New York Stock Exchange to close its trading floor and temporarily move to all-electronic trading beginning Monday. NYSE expects trading to proceed as normal.
Trump announced Sunday he activated the National Guard in California, New York and Washington state — the three states with the highest reported coroavirus deaths — to curtail the virus’ outbreak.
“Things will get worse before they get better and the markets will continue to reflect that reality,” said Marc Chaikin, CEO of Chaikin Analytics, in a note. “This means that a bottoming process will take more time and probably inflict more damage to equities.”
Stocks suffered their biggest one-week decline since the financial crisis in 2008, with the S&P 500 dropping more than 13%. Those losses put the broad market average more than 32% below its record set on Feb. 19.
Last week ended with all 11 S&P 500 sectors closing more than 20% below their respective 52-week highs. The S&P 500 was also on pace for its worst monthly performance since 1940.
Expectations for the U.S. economy have also quickly deteriorated. Economists at Goldman Sachs wrote Friday they expect a 24% contraction for the second quarter after a 6% drop in the first quarter. Morgan Stanley economist Ellen Zentner said in a note Sunday she expects a historic 30% contraction in the second quarter.
“Suffice to say that the economy entered a unique, sudden-stop recession in March,” wrote Prajakta Bhide, strategist at MRB Partners. “If there is no concrete evidence of meaningful progress toward controlling the epidemic in the next eight weeks, there will be no basis for people and businesses to feel safe to begin to normalize economic activity.”
Investors have also been rattled by a sharp decline in crude prices. West Texas Intermediate futures fell 29.3% last week, their biggest weekly fall since January 1991. U.S. crude is also more than 66% below its most-recent 52-week high.
The steep losses in crude are forcing investors to sell other assets such as stocks or bonds to to cover the losses in their energy positions. Crude futures briefly fell more than 8% Sunday night before clawing back most of those losses.

Mar 19, 2020

US Market | Futures Indicator: Stock futures point to more losses a day after the Dow closed below 20,000 for first time since 2017

Fred Imbert, Thomas Franck

Futures contracts tied to the major U.S. stock indexes pointed to more losses at the open Thursday, building on the previous session’s steep losses as the coronavirus crisis rages on.
As of 7:58 a.m. ET, Dow Jones Industrial Average futures were down more than 500 points, implying an opening loss of more than 400 points. S&P 500 and Nasdaq 100 futures also fell.
“Markets are clearly in a state of panic and forced liquidations – but risks remain skewed to the upside and this should become much more apparent once some of the solvency issues are addressed,” Adam Crisafulli, founder of Vital Knowledge, said in a note.
Traders also looked ahead to the release of weekly jobless claims at 8:30 a.m. to assess some of the economic damage from the coronavirus on the U.S. economy.
The moves followed yet another violent day on Wall Street on Wednesday as investors swung back to pessimism after Tuesday’s 6% bounce.
The Dow dropped 1,338.46 points, or 6.3%, on Wednesday and clinched its first close below 20,000 since February 2017. The Dow was down more than 2,300 points at the lows of the session. The S&P 500 dropped 5.2% to 2,398.10 and closed nearly 30% below a record set last month as both indexes sank further into bear markets.
An eye-watering spike in Treasury yields has also kept investors anxious. The 10-year Treasury rate rose 22 basis points to 1.18% on Wednesday following a rise of more than 30 basis points on Tuesday as it rebounds from record lows.
On Wednesday evening, the European Central Bank (ECB) announced a new Pandemic Emergency Purchase Program that will deploy €750 billion ($819 billion) to purchase securities to help support the European economy. The central bank said purchases will be conducted until the end of 2020 and include a variety of assets including government debt.
The ECB’s action follows similar initiatives by the Federal Reserve, its U.S. counterpart. The Fed announced earlier this month plans to pump an additional $1 trillion into the U.S. economy through asset purchases and cut the federal funds rate to zero. The Fed also said Wednesday night it will create a backstop for prime money market funds.
The spread of the coronavirus also led the New York Stock Exchange to on Wednesday announced that it will temporarily close its historic trading floor and move fully to electronic trading. The exchange said that two people tested positive for the disease at screenings it conducted this week.
All-electronic trading will begin on March 23 at the open, the exchange said.
Voicing investor fears about the virus, longtime hedge fund manager Bill Ackman joined CNBC on Wednesday to warn that the novel coronavirus will wreak destruction on financial markets and the U.S. economy without unprecedented action by the federal government.
Ackman and scores of other economists and investors worry that the virus, and efforts to prevent its spread, could undermine U.S. manufacturing, exports and ultimately U.S. GDP growth.
The Pershing Square executive called upon President Donald Trump to start a “spring break” U.S. for one month and suspend all interest, rent and tax payments for the duration.
We need to shut it down now... This is the only answer,” the billionaire investor said. “America will end as we know it. I’m sorry to say so, unless we take this option.”
Stocks moved off their lows toward the end of Wednesday’s session, however, after the Senate had enough votes to pass a bill expanding paid leave and unemployment benefits in response to the virus as part of what’s expected to be a whopping governmental response to avoid a downturn.
Senate Majority Leader Mitch McConnell said Wednesday he would vote for the plan despite what he called “real shortcomings.” With the urgent need to take action, “I do not believe we should let perfection be the enemy of something that will help even a subset of workers,” he said.
The White House is weighing a fiscal package of more than $1 trillion that includes direct payments to Americans and financial relief to small businesses and the airline industry.
Wall Street has been on an unprecedented roller-coaster ride amid the coronavirus turmoil, with the S&P 500 swinging 4% or more in either direction for eight consecutive sessions.
—CNBC’s Eustance Huang and Christine Wang contributed to this report.

Mar 18, 2020

US Market | Futures Indicator: Stock futures drop, hit 'limit down' halt, amid unprecedented volatility from coronavirus crisis

Yun Li

Stock futures pointed to big losses on Wednesday as the markets remained highly volatile with the government response to the coronavirus fallout still unfolding.
A violent reversal in Treasury yields in response to a potential $1 trillion stimulus package helped to unnerve investors.
Around 6:42 a.m. ET, futures on the Dow Jones Industrial Average indicated a more than 1,000-point loss at Wednesday’s open. S&P 500 and Nasdaq-100 futures were also down. Futures contracts for the indices were in “limit down” territory, a situation where trading is halted after futures have hit a 5% loss and can go no lower. The S&P 500 gained 6% on Tuesday.

Exchange-traded funds that track the indexes are not subject to limit-down restrictions, however, and suggested what the open would look like. The SPDR S&P 500 ETF was down 6% in premarket trading, the SPDR Dow Jones Industrial Average ETF was down 6.5%, and the Invesco QQQ Trust was off 5.8%.
Wall Street has been on an unprecedented roller-coaster ride amid the coronavirus turmoil, with the S&P 500 swinging 4% or more in either direction for seven consecutive sessions. This tops the previous record of six days from November 1929, according to LPL Financial. The S&P 500 is 25% off its record high through Tuesday’s close.
The 10-year Treasury yield jumped to 1.13% Wednesday after trading around 0.77% midday Tuesday before details of the potential stimulus emerged. It began the week at around 0.65%. It wasn’t the outright rate level that caused uneasiness among traders, but the rapid nature of the move overnight.
On Tuesday, CNBC learned the White House is weighing a fiscal package of more than $1 trillion that includes direct payments to Americans and financial relief to small businesses and the airline industry. Treasury Secretary Steven Mnuchin also said separately at a press conference that corporations will be able to defer tax payments of up to $10 million while individuals could defer up to $1 million in payments to the Internal Revenue Service.
“When you decimate the restaurant industry, the travel industry, the hotel industry, the airline industry .. the cruise line industry, obviously you’re going to take a huge divot out of economic activity,” DoubleLine Capital CEO Jeffrey Gundlach said on a webcast Tuesday after the bell. Gundlach put the odds of a recession at 90% and said it was “ludicrous” to think otherwise.
Gundlach also commented on the reversal higher in Treasury yields, noting it could put the U.S. in the uncomfortable position of having both a weak economy and rising rates, as new debt issuance to pay for the stimulus floods the bond market.
Treasuries are the latest market to see extreme moves. The recent overnight trading of futures contracts has seen unusual volatility, leaving many investors to believe computer trading has exaggerated moves in the market’s collapse stemming from the coronavirus outbreak.
The movement comes amid historic highs on the Cboe Volatility Index, which closed above its 2008 financial crisis peak on Monday. That index looks at options prices for the S&P 500 and is also known as the “fear gauge” of Wall Street.
On Tuesday, the markets rebounded from their deepest rout since 1987 as investors grew hopeful that the Trump administration’s massive fiscal stimulus plans will rescue the economy, which is at risk of falling into a recession due to the coronavirus impact.
Mnuchin told Republican senators that unemployment could reach 20% if Congress doesn’t enact the trillion-dollar stimulus package he proposed, CNBC reported Tuesday evening, citing a source familiar with the matter.
The Dow soared more than 1,000 points on Tuesday to cap off another volatile session, making back less than half of Monday’s steep losses.
On Tuesday, investors also cheered the Federal Reserve’s amped-up effort to help companies having a hard time getting short-term funding. The bank announced a special credit facility to purchase corporate paper from some issuers. This follows the Fed’s emergency $700 billion quantitative easing program and a further 100 basis point cut to interest rates on Sunday.
“Signs are that the pandemic will be brought under control and that the economy will get enough support to weather the storm,” said Brad McMillan, chief investment officer at Commonwealth Financial. “Make no mistake, there will be damage. But from a market perspective, the question will be whether the damage is greater than markets now expect, or less.”

—CNBC’s Eustance Huang and Christine Wang contributed to this report.

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