US market. Chinese PMI causes skepticism.
Futures for US indices are declining before the opening of trading in the United States. Yesterday, we observed a rebound, but investors are still skeptical of risky assets amid continued spread of COVID-19 without a clear slowdown. The number of states introducing isolation measures is increasing.
Today, investors are encouraged by the publication of statistics on business activity in China, although government data, and many market participants are somewhat skeptical about such changes. The Statistical Office reported that in March the PMI rose to 52 from February 35.7. Of course, this is a strong change, taking into account the long quarantine in the PRC and the further spread of the virus in the world.
At the beginning of the week, markets more likely welcomed Trump’s decision to extend measures to prevent the spread of coronavirus until April 30, although he flaunted a few days ago that the deadlines could be shorter. The number of infections so far continues to grow at a pace that is not encouraging. For investors, in the absence of a vaccine, for example, China is more or less clear that isolation measures work.
More and more Americans remain at home in accordance with the orders of the states and individual cities, but these measures are still not as directive and quick as in China. According to business media, about 75% of the population has already faced restrictions.
Today, oil and gas companies are leading the premarket. Oil prices are trying to push themselves off from the lows. June WTI futures are trading at $ 25, while May futures are at $ 21. December costs almost $ 34. Market participants expect that the oil price war will not be able to keep prices low for a long time.
Shares of Halliburton (+ 6%), Marathon Oil (+ 7.7%), Centennial Resource Development (+ 17%) are getting more expensive.
Shares of Abbot (+ 2%), which announced the approval of its test for the diagnosis of coronavirus, continue to grow.
Shares of the Carnival cruise (-7%) are getting cheaper. The company, obviously affected by the influence of quarantine due to the spread of coronavirus, announced that it will conduct an additional issue of $ 1.25 billion and also place convertible bonds.
Heavy stocks - Apple (-0.4%), Microsoft (-0.8%) - in a small minus.
The S&P 500 indexes worked the second level of correction at 38.2% Fibonacci relative to the wave of decline from record levels, which is already an impressive rebound. Recovery by 2800 cannot be ruled out, but higher reference points are still difficult to speak without obvious progress in stopping the spread of COVID-19.