Market Recap: Private employment payrolls surge in January; Ford shares sink on weak 2020 forecast
Stocks on Wall Street advanced for the third trading session in a row as better-than-expected economic data in the US continues to dampen the potential negative impact of the coronavirus outbreak in China. The S&P500 hit a new high on Wednesday, rising 1.13% or 37.1 points to 3,334.69. The energy sector was the best performing S&P500 sector, advancing 3.78% as crude oil prices recover.
Ford shares fell 9.48% after the company posted worse-than-expected forecasts for 2020. The automaker said that it expects earnings before interest and taxes falling to a range of US$5.6bn to US$6.6bn this year, missing analysts' average estimate of US$7.4bn.
Tesla's stock sagged on Thursday after a company executive was reported to have said that cars initially scheduled for delivery in early February will be delayed thanks to the outbreak of the new coronavirus. Its shares tumbled 17.18% to US$734.70 per share on Wednesday after spiking 19.89% and 13.73% in the last two trading sessions.
The greenback gained against the majority of the major currencies aside from the Australian dollar thanks to a surge in private payrolls in the US and better-than-expected PMI data for the non-manufacturing sector in the US. ADP employment change grew by 291,000 in January, besting analysts’ estimates of 157,000. ISM's non-manufacturing PMI rose to 55.5, indicating that the services sector in the US continues to expand at a faster rate in January.
Safe haven assets were mixed on Wednesday. The yen and US Treasuries fell while Gold gained. Benchmark 10-year yields gained 5.2bps to 1.65%.
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Oil recovered strongly on Wednesday, with both Brent and WTI crude futures rising more than 2% as oil traders grew more optimistic for potential action from OPEC+ members to boost oil prices. OPEC+ extended discussions for a third day after members failed to arrive at a solution for dampening oil prices as a result of the coronavirus outbreak.
In Asia, stocks look set to extend a two-day rally on Thursday. Both the Nikkei and KOSPI were more than 1% higher on Thursday morning, as of 9am (GMT +8).
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The death toll from the coronavirus outbreak has risen to 563, with more than 28,000 confirmed cases of infection. The WHO cautioned that a vaccine is a long way off after earlier reports that there were breakthroughs in the UK and China for potential treatments for the virus.
Twitter (9pm), Kellogg (10.30pm) are among the companies that are set to report quarterly earnings today while Uber (5.30am) and Pinterest (6.30am) will report their respective earnings early tomorrow. (All timings in GMT +8)
Economic releases for the day ahead include (all timings in GMT +8):
- Germany Dec Factory Orders (3pm)
- ECB Economic Bulletin (6pm)