Thursday April 9th

9-04-2020

Dow futures jump 200 points as Fed takes more steps to bolster the economy

U.S. stock index futures indicated slight losses on Thursday as investors digested the latest U.S. unemployment data and details on the Federal Reserve’s lending program for Main Street. Futures on the Dow Jones Industrial Average were up 60 points, indicating a loss of 16 points at the open. S&P 500 and Nasdaq 100 futures traded lower. More than 6 million Americans filed for unemployment benefits last week. Economists expected an increase of 5 million. The latest data built on the record-shattering prior two readings of 6.6 million and 3.3 million. Futures came off their lows, however, after the Federal Reserve unveiled details on its Main Street lending programs, which are geared to helping small and medium-sized businesses hindered by the coronavirus outbreak. The programs will total up to $2.3 trillion. The Fed Chairman Jerome Powell is set to speak later on Thursday. The latest unemployment data and the Fed’s announcement came after a surge in the stock market that took place on Wednesday. The rally was fueled in part by Sen. Bernie Sanders dropping out of the presidential race, as well as hopes that the coronavirus outbreak may soon turn a corner. Both the Dow and S&P 500 gained more than 3% on Wednesday. The Nasdaq jumped 2.6%. Wednesday’s rally put the S&P 500 and Dow up more than 10% each for the week while the Nasdaq was up 9.7%. But some believe that stocks are now getting ahead of themselves and investors should exercise caution. “I think this is kind of buy the rumor and potentially we sell the news when reality sets in of what we are going to see what’s on the other side,” billionaire investor Mark Cuban said Wednesday on CNBC’s “Closing Bell.” “I think people are naturally optimistic right now in terms of the market. I just don’t think they’re really factoring in what we’re going to see on the other side,” he added. After Wednesday’s rally, the Dow is up 29% from its low and the Nasdaq Composite is down less than 10% this year. “The stock market is at a very uncertain point now. The impact of the coronavirus on future earnings is yet to be determined. We aren’t out of the woods,” said Nancy Davis, chief investment officer at Quadratic Capital. Stocks in Asia Pacific were mostly higher on Thursday ahead of the release of the U.S. unemployment claims report. Mainland Chinese stocks edged higher on the day, with the Shanghai composite up 0.37% to about 2,825.90 while the Shenzhen composite gained 0.846% to around 1,755.37. Hong Kong’s Hang Seng index advanced 1.35%, as of its final hour of trading. Over in South Korea, the Kospi gained 1.61% to close at 1,836.21. Japan’s Nikkei 225, on the other hand, closed fractionally lower at 19,345.77 while the Topix index finished its trading day 0.6% lower at 1,416.98. Oil prices rose on Thursday on expectations the world’s largest oil producers would agree to cut production at a meeting later in the day as the industry grapples with a coronavirus-driven collapse in global oil demand. Brent crude futures rose 1.2%, or 41 cents, to $33.25 a barrel as of 0529 GMT. The contract rose to an intra-day high of $33.90, climbing for a second day. U.S. West Texas Intermediate (WTI) crude futures were up 3.3%, or 82 cents, at $25.91 a barrel, after earlier climbing by as much as 6.1%. Gold prices gained 1% on Thursday on safe-haven buying ahead of an extended weekend and a crucial meeting of top oil producers, with bullion also latching on to gains in wider markets amid hopes the coronavirus pandemic was close to peaking. Spot gold was up 1% to $1,661.64 per ounce, having hit a four-week high of $1,671.40 on Tuesday. It has risen more than 2.6% this week. Most markets are closed for Good Friday on April 10. U.S. gold futures rose 1.3% to $1,705.90.