Stocks Halt 2-Day Drop; Oil Rises From Record Lows: Markets Wrap
Shares fell in Tokyo, Seoul and Sydney though declines were shallower than those in the U.S. on Tuesday.
(Bloomberg) -- U.S. stocks halted a two-day slide as investors digested the latest round of corporate earnings and optimism about the eventual reopening of the economy increased. Oil rose from historic lows.
The S&P 500 Index rebounded from the worst sell-off in three weeks amid quarterly results that sparked speculation a recovery will be sooner than expected. Chipotle Mexican Grill rose on sales that topped estimates, while Texas Instruments advanced on solid results. Treasury Secretary Steven Mnuchin said he anticipates most of the economy will restart by the end of August. House lawmakers on Thursday are set to pass another round of aid.
“Until the path becomes clearer, volatility is likely the name of the game as the market weighs the good, bad and ugly of this pandemic,” said Mike Loewengart, managing director of investment strategy at E*Trade Financial.
The oil market continued to hold investor attention. A day after trading negative, futures for West Texas Intermediate crude surged above $13 a barrel after President Donald Trump ordered the Navy to destroy any Iranian gun boats that harass American ships at sea. The biggest oil exchange-traded fund reshuffled the mix of futures it owns to track crude prices for a second day, extending their average expiration amid unprecedented volatility in its markets.
Investors are continuing efforts to assess the pandemic’s damage to the global economy, with the oil market chaos suggesting it will be deeper or longer than anticipated by those who drove the S&P 500 up 28% from its March lows. Governments are devising ways to return people to work even as they discover infections are more extensive than they insisted only weeks ago.
“What I think markets are picking up on is there is light at the end of the tunnel and there’s visibility on what a reopening will look like,” said Michael Reynolds, investment strategy officer at Glenmede Trust Co. “This gives visibility to the next couple of phases and when the clouds can clear.”
The Stoxx Europe 600 Index increased broadly in the wake of Tuesday’s slump. Treasuries fell along with European bonds and the dollar strengthened.
Meanwhile, European consumer-goods companies from brewers to paint-makers sounded notes of caution on spending. Heineken NV canceled its interim dividend, while Kering said it doesn’t see a recovery in the U.S. or Europe before at least June or July after sales at its flagship brand Gucci tumbled.
“There’s no way you can predict earnings right now,” Michael Cuggino, portfolio manager at Pacific Heights Asset Management LLC, said on Bloomberg TV. “It’s virtually impossible until we have more visibility with respect to how to world comes out of the coronavirus on the other side.”
Elsewhere, stocks slipped in Japan but climbed in other major Asian markets. Gold rebounded to $1,700 an ounce.
These are the main moves in markets:
Stocks |
|
|
|
|
Currencies |
|
|
|
|
Bonds |
|
|
|
|
Commodities |
|
|
|
©2020 Bloomberg L.P.