U.S. stock index futures gained as countries across the globe weighed when it would be safe to ease restrictions set in place to help contain the spread of coronavirus.
Contracts on the S&P 500 gained 1.6% as of 6:51 a.m. in London, after declining 0.7% on Monday. Futures advanced 1.7% on the Nasdaq 100 Index and climbed 1.6% on the Dow Jones Industrial Average. President Donald Trump declared he has “total” authority to order states to relax social distancing to combat the coronavirus outbreak and reopen their economies.
U.S. stock futures got a boost during Asian trading hours after data showed China’s exports in yuan terms fell less than expected in March and Xinhua News Agency reported that two companies got approval to begin human clinical tests for coronavirus vaccines.
”We are seeing the reactions toward news of vaccines going into clinical trials by China’s state media Xinhua coupled with the trade numbers in yuan terms showing exports doing better than expected,” said Jingyi Pan, a market strategist at IG Asia Pte. in Singapore.
As earnings season kicks off this week, traders are looking for a sense of how bad the hit to global profits could be as the pandemic upends the global economy. With the outbreak sowing chaos across the world, the market has been lost in a fog when it comes to corporate earnings.
“Investors are keeping watch on the U.S. financial sector earnings results that will be released this week,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management. “Once the results come, futures will adjust accordingly.”
On Monday, the S&P 500 Index closed 1% lower, paring an earlier drop of as much as 2.5%, with gains in consumer discretionary, technology and communication companies offsetting declines in other major groups. Oil slipped as investors weighed whether an unprecedented deal by the world’s biggest producers to cut output could stabilize the market.
The S&P 500 is trading below the 2,800 level — a major support line in 2019 that served as resistance the prior year. With one of the murkiest earnings seasons kicking off this week, there may be few catalysts to push stocks higher.
“We’re in for a tough year,” said Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Corp. in a Bloomberg Television interview. Earnings are going to be down “by about 30%,” she added.
For more articles like this, please visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted business news source.
©2020 Bloomberg L.P.