Markets were primed for another bounce Friday morning after positive developments on the coronavirus front caused Nasdaq futures to hit its “limit up,” but it was short-lived as indexes pared those early gains, plus stocks to watch today in the Money & Markets Opening Bell.
The Top Story
At 7:17 a.m. EDT Dow Jones futures were trading 590 points, or almost 3%, higher, while the S&P 500 rose 2.6% and the Nasdaq was up 3.5%.
Those gains didn’t last after the opening bell rang, though. The Dow and S&P 500 were up only 0.1% at 10 a.m. EDT after sinking into the negative momentarily. The Nasdaq was still up 1.2% at that time.
The Nasdaq trades heavily in the tech sector and the index hit its limit up, putting a hold on trading after jumping almost 5%. Trading is paused when indexes hit certain levels, up or down, in overnight trading as a way to curb panic buying or selling. A number of “limit down” triggers have gone off during trading this week as volatility has ratcheted up.
Investors found some positives going into the market open Friday, including California’s statewide order to “shelter in place” in an effort to slow the spread of the coronavirus (COVID-19).
Oil also continued to surge back after collapsing over the last two weeks. Crude futures were up 7% once again after posting its largest gain ever Thursday.
Central banks across the world have stepped in to provide stimulus as the global economy faces a potential recession from the impacts of COVID-19. That, in turn, has helped the U.S. dollar decline again after it surged earlier this week while everyone looked for safety and liquidity.
Investors will now watch for what U.S. President Donald Trump, along with Congress, will announce concerning the coronavirus stimulus package that is likely to be more than $1 trillion.
The plan so far includes a potential cash payment of up to $1,200 to every American, according to a Thursday announcement from Senate Republicans. It would also include a $50 billion bailout for the U.S. airline industry that caps executive compensation for two years if a company receives bailout funds.
Stocks to Watch Today
Microsoft Corp. (NASDAQ: MSFT) — Shares of the tech giant popped over 6% at one point overnight as investors bet on its chances to weather a potential recession.
Slack Technologies Inc. (NYSE: WORK) — The business messaging application gained over 16% Thursday, and rose another 8% before the opening bell as employees are working from home more and more.
Roku Inc. (NASDAQ: ROKU) — Sticking with the “stay-at-home” trend, shares of streaming platform rose over 5% in premarket trading. Roku stock is a cheaper alternative to Netflix, trading around $75 per share now.
News You Can Use
Vitol, the world’s largest oil trader, warned global oil demand could fall more than 10% as COVID-19 lockdowns ramp up across the world.
“A lockdown like in Italy can be taken in the U.S. only if the spread of the virus gets out of control. That is not our base case,” Giovanni Serio, Vitol’s head of research said, according to Reuters.
Two GOP Senators Questioned Over Stock Sales Amid Crash
Senate Intelligence Committee Chairman Richard Burr, R-N.C., is under fire after selling between $630,000 and $1.7 million in stock one week before financial markets around the world began to sink.
Burr’s biggest sales were companies most vulnerable to an economic slowdown, including Wyndham Hotels and Resorts, which has lost two-thirds of its value in the crash, and Extended Stay America, which have sunk by more than half.
Georgia Senator Kelly Loeffler also sold off large amounts of stock in late January and early February as markets hit all-time highs.
Both government officials have received nonpublic information surrounding the coronavirus outbreak from Executive Branch officials.
More to come as this story develops.
Germany Considers €500B Fund to Support Businesses
Germany wants to help its companies impacted by the coronavirus outbreak, and it’s mulling a half-trillion euro fund to do it. The plan is modeled after a similar fund that was used to prop up banks after the financial crisis in 2008.
What We’re Reading
Trump, Cuban ‘OK’ With Banning Buybacks for Bailouts. Why That’s a Bad Idea (Money & Markets)
Opinion: Get Ready for the Bounce (Money & Markets)
The Billionaire Interview That Tanked The Stock Market (Forbes)
Earnings Report
Here are the companies releasing earnings reports today:
BRP Inc. (NASDAQ: DOOO)
Hibbett Sports (NASDAQ: HIBB)
Pyxis Tankers Inc. (NASDAQ: PXS)
Tiffany & Co. (NYSE: TIF)
Turquoise Hill Resources Ltd (NYSE: TRQ)
Check back each morning before the opening bell for stocks to watch today with Opening Bell, here on Money & Markets.