- S&P 500 Futures register mild losses, in contrast to Wall Street’s recovery moves.
- Speculations concerning the flu outbreak in the US join coronavirus fears to weigh on the risk-tone.
- Odds of ability to conquer the pandemics are high, US President Trump keeps pushing for the economic restart.
- US economic docket, virus updates will be the key.
Although Wall Street benchmarks flashed over 2.0% gains each by their Wednesday’s close, S&P 500 Futures fail to carry the gains forward during the early Asian session on Thursday. The futures linked to the key US equity benchmark drop 0.45% to 2,775 by the press time.
The current risk-off seems to have taken clues from the comments made by the US centers for disease control and prevention Director Robert Redfield who cited fears of having flu and the coronavirus outbreak at the same time. Though, measured response and availability of vaccines for the flu restrict the risk aversion.
Also on the positive side could be US President Donald Trump’s further push for the economic restart as he encourages state governors to follow a phased-approach to reopening.
The earlier recovery in the risk-sentiment could be traced from the pause in oil slump as well as a further flattening of the coronavirus (COVID-19) curves in the US, Europe and the UK.
While the virus updates are likely to keep the driver’s seat, the US economic calendar will also be the key to watch. The reason is the presence of the weekly Jobless Claims and preliminary readings of Markit activity numbers on the docket.
“Google search activity suggests that jobless claims will fall again, with the level still extraordinarily high. We forecast a drop to 4.2mn from 5.2mn last week and as high as 6.9mn in the last week of March. Claims averaged 212k per week in the first 10 weeks of the year. Separately, the Markit PMIs weakened in March, but the April data will likely be even weaker. That pattern certainly came through in the NY and Philadelphia Fed manufacturing surveys. We forecast sharp declines in April to 35.0 and 31.0 for the mfg. and services PMIs, from 48.5 and 39.8, respectively,” said TD Securities in its latest release.
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