Stocks extended gains Monday as investors geared up for another week of closely monitoring developments around the global coronavirus outbreak and policymakers’ responses to the pandemic.
Over the weekend, coronavirus cases rose in major centers around the world but at an at least temporarily slower pace than in recent weeks.
The state of New York, which leads the nation with about 130,000 positive cases, on Monday reported 599 new coronavirus deaths, or about level with the 594 reported on Sunday. But Governor Andrew Cuomo in a Monday press briefing reiterated that even if the pandemic in the state was beginning to plateau, it was “plateauing at a very high level, and there is tremendous stress on the health-care system,” he said.
Elsewhere, Italy reported the slowest rise of new deaths in two weeks on Sunday. France and Spain – two other European centers for the virus – also reported a deceleration in new deaths.
While the slowing increases in case counts serve as a positive development, many analysts remain cautious and have still not ruled out further volatility in the near-term.
“Until the virus shows a decline in its trajectory and rolls over, a semblance of normalcy will likely remain out of reach,” John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, wrote in a note Monday. “The ultimate extent of the damage to the economy and the corporate sector will be hard to determine in the near term and will likely vary greatly within segments of the economy and sectors of the markets.”
“For now the markets will likely remain hostage to news on how long it will take to ‘get back to business’ and ‘the good life,’” he added. “We’d expect markets to continue trading on a combination of fear, technical factors and wistful hope with fundamentals clouded by the uncertainty weaved by the insidious virus.”
Official government guidance around controlling the spread of the coronavirus continues to be dynamic in the U.S., with the Centers for Disease Control and Prevention on Friday adding a recommendation for Americans to wear cloth face coverings when leaving their homes.
And U.S. leaders’ rhetoric around the outbreak is still dire, with many Americans in states across the country preparing to remain under stay-in-place orders for at least the coming weeks.
On Sunday, U.S. Surgeon General Vice Admiral Jerome Adams told Fox News on Sunday that this coming week “is going to be the hardest and the saddest week of most Americans’ lives, quite frankly,” adding that it will be “our Pearl Harbor moment.” He also noted in the interview, however, that Americans could “change the trajectory of this epidemic” by following social distancing guidelines.
And for equity markets, visibility as to the duration and extent of the outbreak would be a welcomed respite. Stocks ended last week lower as volatility returned to equity markets following the prior week’s advances, as rapidly deteriorating economic data began to reflect the impact of the coronavirus outbreak. The March jobs report – which collected data just through about the 12th of the month – already showed U.S. employers cut 701,000 non-farm payrolls, before widespread social distancing measures had even gone into effect.
With this in mind, Thursday’s initial jobless claims report will again be a closely watched print, with consensus economists expecting to see 5 million new unemployment claims filed for the week ended April 4. The prior week, jobless claims skyrocketed to a record 6.648 million.
4:07 p.m. ET: Stocks rally to start the week, Dow jumps 1,627 points or 7.7% in best day in 9 sessions
Here were the main moves in markets as of 4:07 p.m. ET:
S&P 500 (^GSPC): +175.03 (+7.03%) to 2,663.68
Dow (^DJI): +1,627.46 (+7.73%) to 22,679.99
Nasdaq (^IXIC): +540.15 (+7.33%) to 7,913.24
Crude (CL=F): -$1.95 (-6.88%) to $26.39 a barrel
Gold (GC=F): +$57.30 (+3.48%) to $1,703.00 per ounce
10-year Treasury (^TNX): +8.9 bps to yield 0.6760%
2:48 p.m. ET: Stocks rise further, Dow climbs 1,200+ points
Stocks continued to climb with less than two hours left of the regular trading session. Each of the three major indices advanced more than 5.6%.
The Utilities and Materials sectors led gains in the S&P 500. Shares of Boeing and American Express outperformed in the Dow.
Here were the main moves in markets, as of 2:48 p.m. ET:
S&P 500 (^GSPC): +139.2 points (+5.59%) to 2,627.85
Dow (^DJI): +1,233.67 points (+5.86%) to 22,286.2
Nasdaq (^IXIC): +418.29 points (+5.68%) to 7,791.93
Gold (GC=F): +$59.70 (+3.63%) to $1,705.40 per ounce
10-year Treasury (^TNX): +7.8 bps to yield 0.667%
2:38 p.m. ET: Crude oil settles lower as investors hope for OPEC+ production cut agreement later this week
U.S. West Texas intermediate crude oil futures settled lower by 8%, or $2.26, on Monday to $26.08 per barrel. This was the commodity’s first price decline in three sessions, after posting a cumulative weekly advance of more than 30% last week.
Futures for Brent crude oil, the international standard, were trading 2.99% lower to $33.09 per barrel as of 2:32 p.m. ET.
A meeting between OPEC and its allies is now set to take place on Thursday, after originally being scheduled for Monday. President Donald Trump has suggested the Saudi Arabia and Russia would use the forum to agree to an output cut totaling some 10 millions of barrel per day, easing a supply glut that has contributed to a precipitous decline in oil prices so far this year.
12:19 p.m. ET: Luckin Coffee shares drop as chairman, CEO give up company shares after company defaults on loan
The CEO and chairman of the beleaguered Chinese coffee company Luckin Coffee have each given up shares after the firm defaulted on a $518 margin loan facility, according to a statement from Goldman Sachs on Monday.
“A total of 515,355,752 Class B ordinary shares and 95,445,000 Class A ordinary shares of the Company have been pledged to secure the Facility, including shares additionally pledged by an entity controlled by the family trust of Ms. Jenny Zhiya Qian, the Company’s CEO,” according to the statement.
Luckin Coffee American depository receipts dropped another 14.5% on Monday, after falling a total of 79% last week after the company disclosed an internal investigation alleged fraud by its former chief operating officer.
11:12 a.m. ET: Stocks rally, Dow adds more than 1,000 points
Stocks continued to climb as Monday’s session rolled on, with the Dow up as many as 1,124 points at the highs of the session so far.
Here were the main moves in markets, as of 11:12 a.m. ET:
S&P 500 (^GSPC): +113.1 points (+4.54%) to 2,601.75
Dow (^DJI):+973.13 points (+4.62%) to 22,025.66
Nasdaq (^IXIC): +347.61 points (+4.71%) to 7,721.61
Crude (CL=F): -$1.87 (-6.6%) to $26.47 a barrel
Gold (GC=F): +$41.90 (+2.55%) to $1,687.60 per ounce
10-year Treasury (^TNX): +7 bps to yield 0.659%
10:29 a.m. ET: Zoom shares extend declines as privacy concerns escalate
Shares of Zoom, the video conferencing service that had seen a major run-up in its stock as social distancing measures took hold, are falling again.
The stock dropped Monday for the fifth time in six sessions as mounting privacy concerns and competition weighed on the company. Last week, at least two U.S. state attorneys pressed Zoom for information about its security practices as a surge in users under stay-at-home orders joined the platform.
Credit Suisse downgraded Zoom to Underperform from Neutral on Monday, citing both competition, security and valuation concerns after the stock peaked at $159.56 per share on March 23, or 343% above its IPO price from April 2019.
“Zoom's exponential growth in usage has resulted in additional scrutiny of its technology, leading to a recent spike in security concerns. While many of these issues, especially those stemming from user error, will likely be resolved in short order, we anticipate others may linger for some time,” Credit Suisse analysts including Brad Zelnick wrote in the note.
“Encryption concerns have already caused some high profile customers to curtail Zoom usage (demonstrating low switching costs for [video conferencing]), and we expect others could follow though the majority of organizations likely have no issue,” they added.
10:19 a.m. ET: ‘When you have a 25% drawdown in the S&P 500, you typically get a relatively dramatic snapback’: Strategist
While volatility will likely remain in place over the coming weeks, the recent drawdown in the S&P 500 has created a potential investment opportunity for those with an at least 12-month time horizon, according to at least one strategist.
“When you have a 25% drawdown in the S&P 500, you typically get a relatively dramatic snapback in prices off the bottom,” Terry Gardner, portfolio strategist at CJ Lawrence, told Yahoo Finance’s The First Trade Monday. As of Friday’s close, the S&P 500 was down 26% from its closing high from February 19.
“When you look at the past recessionary periods, or just market crash periods ... what you find is that once the market is down 25%, if you put a dollar in at that point, you had pretty handsome gains over the next 12 months,” Gardner added. “If you look at the 2008, 2009 crisis, if you had bought that market down 25% from the fall of Lehman Brothers, over the next 12 months you had an 18% return.”
He cautioned, however, that given the still-developing coronavirus pandemic, markets will likely still see swings in the near-term.
“We’re working through the three phases of this challenge, one being peak virus. Where are we in terms of peak virus? We’re probably a couple of weeks out from that here at least in the New York metropolitan area,” he said. “[Second], peak panic – we seemed to have passed peak panic for the most part.”
“And then thirdly, peak bad news ... that’s the period we’re going into now. Earnings season is upon us and the news is going to be bad and probably getting worse,” Gardner said. “We’re going to have to see how the market digests those bad reports, those challenges before we get a feel for where the bottom really is put in or not.”
9:32 a.m. ET: Stocks open higher, Dow jumps 900+ points
Stocks held onto overnight gains and rose Monday morning, with each of the three major indices up more than 3.7%.
Here were the main moves in markets, as of 9:32 a.m. ET:
S&P 500 (^GSPC): +96.56 points (+3.88%) to 2,585.21
Dow (^DJI):+860.84 points (+4.09%) to 21,913.37
Nasdaq (^IXIC): +268.28 points (+3.61%) to 7,639.18
Crude (CL=F): +$1.22 (+4.3%) to $27.12 a barrel
Gold (GC=F): +$28.40 (+1.73%) to $1,674.10 per ounce
10-year Treasury (^TNX): +7 bps to yield 0.659%
7:45 a.m. ET: Jamie Dimon underscores JPMorgan Chase’s strength amid coronavirus, asserts the U.S. can ‘emerge from this crisis as a strong country’
In his widely read annual letter to shareholders, JPMorgan Chase CEO Jamie Dimon highlighted the bank’s efforts to support employees, customers and U.S. businesses amid the coronavirus outbreak.
Coming off a record year for revenue and profits, JPMorgan Chase expects to see earnings “down meaningfully in 2020” due to the coronavirus, Dimon noted. But based on the bank’s stress test results submitted to the Federal Reserve in 2019, the company still has the ability to be profitable in an environment with U.S. unemployment peaking at 10% and the stock market down 50%.
And even in a more dire scenario “with GDP down as much as 35% in the second quarter and lasting through the end of the year, and with U.S. unemployment continuing to increase, peaking at 14% in the fourth quarter,” JPMorgan will still “end the year with strong liquidity,” Dimon said.
Here are some of the other main takeaways from the shareholder letter:
During the pandemic, JPMorgan has been using its disaster recovery sites and “implementing alternative work arrangements globally.” More than 180,000 employees are working from home across divisions.
JPMorgan halted its stock buyback program as a precaution to withstand tough times, with Dimon noting he expects “at a minimum...a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008.” But Dimon concluded by saying he believed the nation has “the resources to emerge from this crisis as a stronger country.”
The lender has been “prudently extending credit to businesses of all sizes for working capital and general corporate purposes,” and has extended $950 million in new loans to small business over the past 60 days.
Employees are receiving increased benefits to cope with the crisis, including five additional paid days off for personal needs. Full- and part-time employees still working on-site are receiving special payments of up to $1,000.
7:10 a.m. ET Monday: Stock futures extend gains, Dow futures jump 800+ points
Contracts on each of the three major indices jumped further Monday morning as investors considered a deceleration in coronavirus cases in some of the world’s epicenters for the outbreak.
Here were the main moves in markets, as of 7:10 a.m. ET:
S&P 500 futures (ES=F): up 96.5 points, or 3.89% to 2,579.25
Dow futures (YM=F): up 813 points, or 3.88% to 21,770
Nasdaq futures (NQ=F): up 304.75 points, or 4.05% to 7,827.5
Crude (CL=F): -$0.99 (-3.49%) to $27.35 a barrel
Gold (GC=F): +$19.60 (+1.19%) to $1,665.30 per ounce
10-year Treasury note (^TNX): +6.5 bps to yield 0.654%
6:25 p.m. ET Sunday: Stock futures rise
Here were the main moves during the overnight session for equity futures, as of 6:25 p.m. ET on Sunday:
S&P 500 futures (ES=F): up 37 points, or 1.49% to 2,519.75
Dow futures (YM=F): up 288 points, or 1.37% to 21,245.00
Nasdaq futures (NQ=F): up 125.5 points, or 1.67% to 7,648.25
6:18 p.m. ET Sunday: Boeing extends closure of Puget Sound, Washington operations
Boeing (BA) said in an announcement Sunday that it is extending the production facility closures at its Puget Sound, Washington-area facilities, “in light of the company's continuing focus on the health and safety of employees, current assessment of the spread of COVID-19 in Washington state, the reliability of the supply chain and additional recommendations from government health authorities.”
Previously, Boeing had anticipated a 14-day temporary suspension of these facilities in Washington state, starting March 25. At the time, Boeing said it would grant paid leave to employees who could not work from home for 10 days. Boeing did not provide an update on its leave policy in its latest public announcement Sunday.