Friday April 3rd

3-04-2020

Stock futures fall in volatile trading as investors evaluate big jobs decline, rebound in oil

U.S. stock index futures fell on Friday after the U.S. government reported a sharp decline in jobs for last month. The losses were muted as oil rebounded for a second day, easing investors’ concerned about economic and job losses in the energy sector amid the coronavirus pandemic. Dow Jones Industrial Average futures fell 88 points, implying an opening loss of about 79 points. S&P 500 and Nasdaq futures also traded lower. U.S. payrolls fell by 701,000 in March, marking the worst jobs report since 2009, while the unemployment rate jumped to 4.4%. However, the report failed to capture the full extent of the economic blow being dealt by the coronavirus outbreak. On Thursday, the Labor Department said jobless claims jumped by a record of 6.6 million for the week of March 27. The decline in stock futures was mitigated by a 12.4% rally in crude, which added to oil’s record rally from the previous session. West Texas Intermediate futures soared 24% on Thursday for their best day ever, lifting the major stock indexes. However, U.S. crude remains about 50% lower for the year despite those sharp gains. Investors are watching oil closely because of its influence on the economy and other financial markets. Giant losses in crude last month triggered wholesale selling across financial assets. Brent crude futures were up 9%, or $2.75, at $32.69 per barrel. Brent soared as much as 47% during Thursday’s session, its highest intraday percentage gain ever, before closing 21% higher, but still at less than half the $66 it was trading at at the end of 2019. U.S. West Texas Intermediate crude also moved back into positive territory, rising 4.5%, or $1.13, to $26.45 per barrel, after surging 24.7% on Thursday. The Dow and S&P 500 rallied more than 2% each on Thursday. However, the major indexes were still headed for their third weekly loss in four. Entering Friday’s session, the Dow was down 1% while the S&P 500 had slipped 0.6%. “Trends have now been Sideways for US and European equities for the last seven trading sessions, despite the massive swings,” said Mark Newton, managing member at Newton Advisors, in a note. “Gains have consolidated, but have not given way to much weakness that is sufficient to expect an immediate test of low.” Both the Dow and S&P 500 remain more than 25% below their respective all-time highs set in February as jitters over the spread of COVID-19 foster volatile trading on Wall Street. There have been more than 245,000 confirmed infections in the United States and more than 6,000 deaths from COVID-19, according to data from Johns Hopkins University. Globally, more than 1 million cases have been confirmed. Stocks in Asia were little changed on Friday following a record surge in oil prices overnight that saw U.S. crude futures soaring more than 24%. Mainland Chinese stocks were lower on the day, with the Shanghai composite down 0.6% to about 2,763.99 while the Shenzhen composite shed 0.47% to around 1,689.57. Hong Kong’s Hang Seng index dipped about 0.6%, as of its final hour of trading. In Japan, the Nikkei 225 closed largely flat at 17,820.19 while the Topix index ended its trading day 0.36% lower at 1,325.13. South Korea’s Kospi also closed just above the flatline at 1,725.44. Gold prices were subdued on Friday as the dollar strengthened, but they were stuck in a narrow range ahead of U.S. nonfarm payrolls data that could provide further clarity on the economic damage from the coronavirus. Spot gold was down 0.15% at $1,610.46 per ounce. The metal has declined nearly 0.5% so far this week after an 8% jump in the previous week. U.S. gold futures dropped 0.6% to $1,627.90 per ounce.