Investors will be focusing on US markets today, while waiting for the House's approval of a massive coronavirus relief bill.
Context: US stocks closed sharply higher yesterday, gaining for the third straight session. The upturn came despite exceptionally concerning data from the Labor Department showing a record increase in jobless claims last week.
Details: The Senate passed the $2 trillion economic stimulus bill late Wednesday, with the House expected to approve the bill today.
The US is now leading in terms of the number of confirmed coronavirus cases globally. The country has reported more than 85,900 cases so far, surpassing China’s 81,800 figure. The virus has claimed around 1,290 lives in the US.
Factory and store closures due to coronavirus fears have led to massive layoffs. Initial jobless claims surged to a whopping 3.28 million last week, from 282,000 in the previous week.
Despite the rising coronavirus cases and jobless claims data, markets responded to the Senate’s passing of the relief package. The Dow jumped 1,352 points to close at 22,552, while the S&P 500 rose 6.24% to 2,630. The Nasdaq 100 closed 5.6% higher at 7,798.
Although the Dow has climbed 21.3% over the past three days, it is still down 21% year to date.
In other news, the yield on the 10-year Treasury note declined 2 basis points to 0.82%, while WTI crude declined $1.89 to $22.60 per barrel on Thursday.
Why it matters: The House is expected to vote on the $2 trillion coronavirus relief bill today. US markets could take a U-turn today, if the bill is not passed. US stock futures are pointing towards a lower open on Wall Street, possibly due to some profit taking following the three-day gains.
Investors await a basket of economic reports from the US. Personal income, which increased by 0.6% in January, is expected to rise 0.4% in February. Personal spending is expected to remain unchanged at 0.2% in February. Core personal consumption expenditures, which rose 0.1% in January, is projected to increase 0.2% in February. The University of Michigan's consumer sentiment index is likely to decline to 90 in March, versus a reading of 101 in the previous month.
Other Markets: Most European indices were trading lower at 9:00am GMT on Friday, with the FTSE 100, German 30 and French 40 down by 3.8%, 1.9%, and 2.7%, respectively.