U.S. equity futures climbed on Friday along with stocks and bonds globally as investors studied the unprecedented government measures to shield jobs and economies from the accelerating coronavirus pandemic. The dollar halted an eight-day rally.
Nasdaq 100 futures dipped after hitting their limit-up earlier, but held on to a gain alongside contracts on the S&P 500 and Dow Jones Industrial Average. There were some big moves in the premarket, with United Airlines Holdings Inc., Mylan NV and MGM Resorts International all up more than 10%. Traders may face extra swings on Friday because options and futures on indexes and equities expire, in what’s called quadruple witching. Tech and industrial goods shares led markets up in Asia and Europe, cutting the weekly drop for stocks worldwide to just under 10%.
Treasuries bounded higher, with the 10-year yield headed for its lowest closing level since Monday. The dollar weakened against its major peers after vaulting more than 8% in the previous eight sessions. The pound, Australian dollar, South Korean won all leaped versus the greenback, as dollar-swap lines kicked in at more central banks. WTI oil extended its historic rebound from a day earlier.
Investors are weighing a faster pace of infections for a virus with no known cure against flickers of optimism that have followed extraordinary government actions, from plans for stimulus and cash handouts to nationalizing companies. Hedge funds, stock exchanges, banks and even brick-and-mortar businesses in the U.S. are lobbying Washington policy makers not to shut markets.
The turmoil across assets is easing even after the World Health Organization said that the pace of infections is speeding up. While cases doubled to 200,000 in the 12 days through Thursday, just one day later the tally already was almost halfway to 300,000.
“We are now starting to lean into risk,” Chad Morganlander, senior portfolio manager at Washington Crossing Advisors, told Bloomberg TV. “The tail of this is going to be potentially somewhat more extended than what the overall market thinks, so we’re not going to get back to business as usual for the next three months, but the policy backdrop across the globe will help soften the blow.”
President Donald Trump sought to reassure skeptical Republicans that he’s aiming to help workers through the crisis, not necessarily corporations, a priority made all the more urgent after data showed U.S. jobless claims came in higher than expected.
In the latest virus developments,
- Global deaths top more than 10,000, according to Johns Hopkins University
- Bank of England cancels annual bank stress tests
- California governor issues statewide order to stay at home
- Airline Cathay Pacific to reduce capacity 96%
- The German government wants to set up a rescue fund for companies hit by coronavirus worth about 500 billion euros, Spiegel reported, without saying where it got the information.
- Spanish apparel giant Inditex SA, owner of the Zara brand, is considering temporarily laying off as many as 25,000 employees from its domestic stores in mid-April if the country’s state of emergency extends beyond that time.
These are the main moves in markets:
- Futures on the S&P 500 Index advanced 1.4% as of 8:36 a.m. New York time.
- The Stoxx Europe 600 Index advanced 2.8%.
- The MSCI Asia Pacific Index surged 3.1%.
- The Bloomberg Dollar Spot Index dipped 1%.
- The euro advanced 0.3% to $1.0728.
- The British pound climbed 2.6% to $1.178.
- The Japanese yen climbed 0.5% to 110.17 per dollar.
- The yield on 10-year Treasuries dipped 13 basis points to 1.01%.
- Germany’s 10-year yield fell nine basis points to -0.28%.
- Britain’s 10-year yield decreased 14 basis points to 0.575%.
- Gold gained 1.9% to $1,499.52 an ounce.
- West Texas Intermediate crude advanced 1.5% to $25.59 a barrel.
–With assistance from Adam Haigh and Jake Lloyd-Smith.
— By Todd White (Bloomberg)