Thursday, March 26, 2020

Asia Times: S&P500 makes first two-day gain in last 28 trading sessions; US lawmakers to vote on stimulus bill

  • Dollar
  • Gold
  • Yen
  • Stocks
  • Oil
  • US Durable Goods Orders


Market Recap: S&P500 makes first two-day gain in last 28 trading sessions; US lawmakers to vote on stimulus bill

Stocks on Wall Street was mixed on Wednesday as investors wait on lawmakers in the US to vote on the much-anticipated stimulus package worth approximately US$2tn later on Wednesday in the US. The latest draft of the stimulus bill includes payments of US$1,200 for each adult and US$500 for each child for lower- and middle-income families in the US. The bill will also include roughly US$500bn and US$350bn worth of loans to larger companies and small businesses respectively.

Most sectors in the S&P500 were higher as volatility seemingly calmed since Tuesday. But the technology and communication services sector were the worst performing among S&P500 sectors. In company news, Boeing shares had a second day of double-digit growth, surging 24.28% after news was released that the aircraft maker plans to restart its 737 Max production by May this year. The US government's rescue package that is to provide US$25bn in loans to air carriers likely also boosted Boeing's share price.

Indexes Daily Change (%) Net Change Closing Price
Dow Jones +2.39% +495.64 21,200.55
S&P500 +1.15% +28.23 2,475.56
Nasdaq -0.45% -33.56 7,384.30
*Source: Bloomberg

The greenback continued to retreat against major currencies thanks to the Fed's unprecedented asset purchase and new direct loan program that targets corporations. The Canadian dollar led gains in the major currency basket as crude oil prices started to recover.

Headline durable goods orders for February may be misleading after beating expectations, to grow 1.2% MoM instead of a 0.9% decline that economists forecasted. But the strong headline growth was mostly due to an increase in defence capital goods. Non-defence capital goods orders excluding aircrafts fell 0.8% almost reversing all of the 1.1% gain in January, signalling that business sentiment had likely already dropped possibly due to lower corporate earnings and revenue figures even before the onset of the coronavirus outbreak in the US.


Safe haven assets were mixed but tilted more towards the downside as investors started to shift back to riskier assets. Gold fell while the yen slightly strengthened against the greenback. US Treasuries were mixed. Two -year bonds gained while longer-term Treasuries fell. Benchmark 10-year yields advanced 2.1bps to 0.87%.

Safe Haven Assets Daily Change (%) Net Change Closing Price
Gold -0.94% -15.42 1,616.90
Silver +1.37% +0.20 14.02
JPY +0.02% +0.02 111.21
*Source: Bloomberg
US Treasury yields Daily Change (bps) Yield (%)
2-Year -4.2 0.33%
10-Year +2.1 0.87%
30-Year +4.9 1.44%
*Source: Bloomberg

Crude oil prices extended into a three-day recovery as the US asked Saudi Arabia to reassure energy markets as uncertainty continues to dominate global sentiment. The US WTI benchmark almost hit US$25 per barrel, even though the expected US stimulus package does not include US President Donald Trump's call for large amounts of crude oil purchases to fill up the US' national reserve.

Oil Futures Daily Change (%) Net Change Closing Price
Brent Crude +0.88% +0.24 27.39
WTI Crude +2.00% +0.48 24.49
*Source: Bloomberg

Asian stocks were mixed on Thursday morning after two-straight days of gains. The Nikkei was down more than 2% in its first hour of trading, likely as prices in the Japanese index normalise after two straight days of rising more than 7%. The KOSPI and the ASX200 were trading in the green in their first hour of Thursday's trading day. US major indices futures were also higher on Thursday morning.

Asia Daily Change (%) Net Change Last Price As of (GMT +8)
Nikkei Index -2.76% -540.35 19,004.53 8:32:10 AM
KOSPI Index +1.11% +18.94 1,723.85 8:52:10 AM
ASX200 Index +1.47% +73.63 5,066.30 8:52:05 AM
*Source: Bloomberg
US Futures Daily Change (%) Net Change Last Price As of (GMT +8)
Dow Futures +1.25% +263.00 21,291.00 8:42:09 AM
S&P500 Futures +0.91% +22.50 2,489.50 8:42:11 AM
Nasdaq Futures +0.80% +59.50 7,526.25 8:42:11 AM
*Source: Bloomberg

Economic releases for the day ahead include (all timings in GMT +8):

  • Germany Apr Consumer Confidence Survey (Gfk) (3pm)
  • UK Feb Retail Sales (5.30pm)
  • BoE Decision on Monetary Policy (8.30pm)
  • US Q4 GDP (T) (8.30pm)
  • US Mar 20 Initial Jobless Claims (8.30pm)