At present, the epidemic is still spreading rapidly around the world, with a total of 1.01 million confirmed cases and more than 50,000 deaths. Despite a record high of 6.648 million U.S. jobless claims last week, the market’s reaction was muted, instead buoyed by a truce in a price war between Saudi Arabia and Russia and hopes that oil production would decline. Us stocks rose across the board, spot gold rose through the 1600 mark, the dollar index broke through the 100 mark, three rare rally. The market is bracing for another big week of data, the us non-farm payrolls report, which is expected to end more than a decade of uninterrupted growth.
More than one million people have been diagnosed globally! Mr Trump tested negative again
News of the outbreak remains a focus for investors, with more than 1.01 million confirmed cases and more than 50,000 deaths worldwide as of 08:30 Beijing time on April 3, according to real-time data update site worldometers.
The outbreak is still accelerating in the United States. According to the global covid-19 data real-time statistical system released by Johns Hopkins university in the United States, as of 6 PM eastern time on April 2, the cumulative number of confirmed covid-19 patients in the United States exceeded 242,182, with a total of 5,758 deaths and 8,889 cures reported in the United States. In the past 24 hours, 33,111 new cases were confirmed and 1,001 new deaths were reported.
US President Donald Trump on Tuesday ordered the federal government to help us manufacturers produce ventilators to treat severe cases of COVID 19 in response to a new outbreak that is rapidly spreading in the us.
In addition, he told a White House press conference on Tuesday that regulations on wearing masks were coming, but would not be “mandatory.” He added: “people wear masks if they want to. In many ways, scarves are better. Scarves are thicker.”
US President Donald trump has tested negative for a novel coronavirus, according to a statement released by the White House on April 2.
White House physician Sean Conley said in a statement that trump will undergo a new, rapid test that will tell him the results in just 15 minutes. He stressed that Mr Trump was in excellent health and did not show any signs of illness.
After a meeting with a visiting delegation of Brazilian President Jair Bbolsonaro in March, which was confirmed by several officials, including his press secretary Fabio Wajngarten, Mr. Trump was tested to prove he was not infected.
The number of new hires in the United States shot up: more than 6.6 million!
The labor department reported on April 2 that new claims for state unemployment benefits rose to nearly 6.65 million last week, the worst on record, from 3.28 million the previous week. That was well above economists’ median estimate of 3.5 million.
Commenting on today’s job loss data, some noted that the spread of novel coronavirus caused more business closures and forced many restaurants and stores to close. Initial claims for U.S. jobless benefits for the week ended March 28 more than doubled from a record set last week, and were revised up slightly to 3.31 million.
Richard Benson, co-chief investment officer at Millennium Global Investments in London, said: “the magnitude of these Numbers is so large compared to expectations that there is no data to tell. It’s very, very bad. So I’m not sure the market is going to trade on the unexpected Numbers that come out of this mix.”
Despite the surge in U.S. jobless claims, stocks reacted coolly as a price war truce between Saudi Arabia and Russia and hopes that oil production would decline helped outweigh some of the drag from a surge in claims caused by a new outbreak shutdown.
By the close, the dow was up 469.93 points, or 2.24 percent, at 21413.44. The nasdaq gained 126.73 points, or 1.72 percent, to 7,487.31. The s&p 500 gained 56.40 points, or 2.28 percent, to 2,526.90.
“The bad data has been priced in,” said Priya Misra, head of global rates strategy at td securities in New York. We know that a large part of the economy is shutting down, so people may just be expecting a strange number. Now the market is more focused on how long the shutdown will last.”
JJ Kinahan, chief market strategist at TD Ameritrade, said: “the stock market has been hit so hard that you wouldn’t see a rally like today unless a lot of people thought it was overdone. Overall, today’s move was a small victory, given how bad the data was, but the market did sort of shrug it off. It also shows that the market is preparing for more bad data.”
Separately, s&p confirmed that the us has A long-term sovereign credit rating of “AA +” and A short-term sovereign credit rating of “a-1 +” with an undecided outlook, although it said the us government’s debt and fiscal deficits were likely to worsen this year due to the economic impact of the new outbreak. Last week, fitch, another big rating agency, also kept the U.S. sovereign credit rating at the highest level, ‘AAA,’ with a stable outlook.
Saudi Arabia called for an emergency meeting of oil producers on April 2, while U.S. President Donald trump said he expected Saudi Arabia and Russia to cut output by as much as 10 million to 15 million barrels a day.
Brent crude ended up 17.8 per cent after rising nearly 50 per cent before falling back sharply. WTI crude ended up 24.67 percent, the biggest one-day gain on record.
The response by Saudi Arabia and Russia to trump’s announcement of a production cut has raised questions in the market about trump’s remarks, which were viewed as “exaggerated” by the President when he said he would cut output by 10 million barrels to 15 million barrels.
OPEC representatives said Russia and Saudi Arabia had not yet reached an agreement on the size of any output cuts, but had called on producers to hold a meeting to “finalise” an agreed cut, with Saudi Arabia hoping non-opec + producers would join the meeting.
Saudi officials said Mr Trump’s talk of a cut of 10m b/d or more was an exaggeration. The best current scenario is a cut of 6m b/d, and it is unclear how Mr Trump got those figures.
Bjornar Tonhaugen, head of oil markets at Rystad Energy, said: “Saudi Arabia and Russia will not cut their national oil production by half (5m b/d) on their own, but we believe the parties will agree to continue discussions and monitor the market.”
As for Mr Trump’s empty promise to cut oil output, some analysts pointed out that there was no sign that Saudi Arabia and Russia would return to the negotiating table any time soon. Moreover, even if an agreement to cut output is finally reached, weak demand from the outbreak will put pressure on crude prices.
As a result, crude oil futures prices continued to fall in early Asian trading on Friday, with WTI crude oil futures down as much as 6% to below $24 a barrel. Brent crude futures extended losses to 2 percent.
In a rare move after the grim us jobless claims report, the dollar surged above 100 and spot gold bounced back above $1,600.
The number of americans filing new claims for jobless benefits hit a record high for the second week in a row, heightening fears of economic damage from the coronavirus outbreak and prompting investors to flee to the safety of gold.
Gold continued its rally on April 2, shooting past the key $1,600 level and as high as $1,619, with focus on the evening’s non-farm payrolls report.
“Initial jobless claims are up and stocks are starting to move lower, leading to a new round of safe-haven buying of gold,” said Bob Haberkorn, senior market strategist at RJO Futures. The longer this goes on, the worse it will be in the long run. “Gold is an asset that should do well with all this volatility, all the money printing and interest rates going to zero to fight the effects of the epidemic.”
The dollar index broke above 100 on Thursday and continued to hover above that level in sub-session trading on Friday as investors fled to the safety of the most liquid U.S. currency as the outbreak wreaked havoc on global trade.
“This historic rally is not over yet,” Goldman said, adding that if stocks fall further, the trade-weighted dollar could rise another 3-5 per cent from its recent high.
At 20:30 tonight, the us will release its march non-farm payrolls report, which is now widely expected to show a loss of 100,000 jobs, the first negative non-farm payrolls report in nearly a decade.
Market forecasts, based on Reuters statistics, are for march data to show U.S. non-farm payrolls at -100,000 (up from 273,000) and the unemployment rate at 4 percent (up from 3.5 percent).
But the march nonfarm survey was conducted in the second week of the month, so it hasn’t fully reflected the impact of the flu on the labor market, and the market may not see the expected big shock.
“The impact of the outbreak on non-farm payrolls is likely to be relatively light given the survey coverage of the march non-farm payrolls report,” ING said. “however, given that U.S. companies started laying off workers and stopped hiring in early march, we could still see negative non-farm payrolls and a possible spike in the unemployment rate.” By April, nonfarm losses could reach millions.
For the nonfarm report, Adam Button expects Friday’s nonfarm data to not show a drop in jobs because the survey was conducted before the massive lockdown.
Kathy Lien, managing director of BK asset management, wrote that Friday’s non-farm payrolls report will be the first to show a novel coronavirus. Economists expect nonfarm payrolls to fall by only 100,000 because, like ADP, nonfarm payrolls were held on March 12. California did not issue its first statewide home ban until March 20, and it quickly spread nationwide in the days that followed. As of the end of March, millions of businesses in the us had closed, but lay-offs are likely to be delayed until the end of the month. As a result, we will not see the full extent of the damage until the revised figures are published next month, and the April figures will be bad.