US stocks will be in focus today, with investors expecting the clearance of the coronavirus economic relief package.
Context: US stocks closed lower on Monday after a volatile session, with the Senate failing again to clear the massive economic fiscal stimulus bill. Even the Federal Reserve’s announcement to buy unlimited assets was not enough to lift investor sentiment.
Details: After fluctuating through the trading on Monday, the Dow Jones and S&P 500 plunged to new three-year lows. In a procedural vote to clear the coronavirus economic relief package, there were 49 to 46 votes in favor of the bill, falling short of the required 60 votes to advance the motion.
The Dow Jones tumbled 3% to close at 18,591 on Monday, while the S&P 500 and Nasdaq 100 dipped 2.9% and 0.3%, respectively.
Housing stocks moved lower, with the Philadelphia Housing Sector Index declining by 7.5%. Banking and commercial real estate stocks witnessed weakness on Monday, along with most other major sectors. Gold stocks climbed sharply following a steep rise in the price of the metal.
The US is witnessing a rise in the daily number of coronavirus cases and the country’s total case count has crossed 46,400. The country has reported 590 deaths so far.
In corporate news, shares of Zoom Video Communications climbed 22% to a new 52-week high with the company benefitting from virtual communication methods being used by companies to support their WFH (work from home) models following the coronavirus outbreak
In other news, treasuries rose following the Fed's announcement of bonds purchases. The yield on the ten-year note fell 17.4 basis points to 0.764%.
Why it matters: US stocks are expected to rebound from yesterday’s losses, with futures pointing towards a higher open today. Markets are hoping for the clearance of the rescue package by US lawmakers. Investors also await the basket of economic reports due today, including services PMI, manufacturing PMI, new home sales and Richmond Fed manufacturing index.
What to watch: The IHS Markit services PMI, which was confirmed at 49.4 in February, is expected to fall to 42 in March. Manufacturing PMI is likely to decline to 42.8 in March, versus February’s reading of 50.7. New home sales, which rose 7.9% to an annual rate of 764,000 in January, is expected to decline 2% in February. The Richmond Fed Manufacturing Index is expected to rise to 9 in March, versus a reading of -2 in February
Other Market: European indices were trading higher at 9:00am GMT, with the FTSE 100, German 30 and French 40 up by 4%, 5.3% and 4.4%, respectively.