Market Analysis

Beyond the Numbers

U.S. Stocks May See Further Upside In Early Trading
3/20/2020 8:52 AM

The major U.S. index futures are currently pointing to a higher opening on Friday, with stocks likely to add to the strong gains posted in the previous session.

The upward momentum on Wall Street comes as traders seem likely to continue to pick up stocks at relatively reduced levels following the sharp drop seen in recent weeks.

After coming under pressure early in the session, stocks moved mostly higher over the course of the trading day on Thursday.

The major averages recovered from initial weakness to end the day in positive territory. The Dow jumped 188.27 points or 1 percent to 20,087.19, the Nasdaq surged up 160.73 points or 2.3 percent to 7,150.58 and the S&P 500 climbed 11.29 points or 0.5 percent to 2,409.39.

Significant strength was visible among networking stocks, as reflected by the 7.6 percent jump by the NYSE Arca Networking Index.

Housing, computer hardware, and oil service stocks also saw considerable strength on the day, while notable weakness was visible among utilities and pharmaceutical stocks.

Commodity, Currency Markets

Crude oil futures are inching up $0.11 to $25.33 a barrel after soaring $4.85 to $25.22 a barrel on Thursday. Meanwhile, after rising $1.40 to $1,479.30 an ounce in the previous session, gold futures are jumping $23.80 to $1,503.10 an ounce.

On the currency front, the U.S. dollar is trading at 110.17 yen versus the 110.71 yen it fetched at the close of New York trading on Thursday. Against the euro, the dollar is valued at $1.0744 compared to yesterday’s $1.0692.


Asian stocks followed their U.S. peers higher on Friday as massive relief packages announced by global central banks and governments helped to ease fears of a global recession.

The Japanese markets were closed for the Vernal Equinox holiday. China's Shanghai Composite index rallied 43.49 points, or 1.61 percent, to 2,745.62 while Hong Kong's Hang Seng index surged as much as 5.05 percent to 22,805.07.

China reported no new domestic coronavirus cases for the second consecutive day, but there were 39 newly confirmed COVID-19 cases on the Chinese mainland, all of which were imported.

China left its benchmark lending rates unchanged today, defying expectations for a reduction as economic activity faces severe downturn after the outbreak of covid-19.

The one-year loan prime rate was retained at 4.05 percent and the five-year loan prime rate at 4.75 percent. The one-year LPR was last reduced in February, by 10 basis points.

Australian markets rebounded from four-year lows after the world's largest central banks stepped up their emergency efforts to support financial markets and the economy.

The benchmark S&P/ASX 200 ended up 33.70 points, or 0.70 percent, at 4,816.60 after rising as much as 5 percent earlier in the day. The broader All Ordinaries index rose 44.90 points, or 0.93 percent, to 4,854.30, with beaten-down bank and energy stocks pacing the gainers.

Banks ANZ, NAB and Westpac surged 7- percent, while Commonwealth declined 1.7 percent. Santos gained 11 percent and Oil Search jumped over 15 percent after crude oil prices skyrocketed overnight.

Contractor CIMIC Group surged as much as 51 percent after falling over 31 percent in the previous session on news HOCHTIEF Australia had increased its stake in the company to over 74 per cent. Afterpay Touch climbed 25.7 percent after recent steep losses and Xero

Telstra slumped 6.1 percent. The telecom giant said it will freeze its job cutting program for six months, suspend late payment fees and disconnections, and hire 1,000 temporary staff to help offset the economic impact of the COVID-19 outbreak.

Seoul stocks rebounded sharply after the U.S. Federal Reserve announced it signed currency swap agreements with nine central banks around the globe, including the Bank of Korea, to relive the liquidity crunch caused by the global spread of the new coronavirus.

The benchmark Kospi soared 108.51 points, or 7.44 percent, to 1,566.17, snapping a freefall of seven consecutive sessions despite continued selling by foreign investors. Market heavyweight Samsung Electronics soared 5.7 percent and No. 2 chipmaker SK Hynix added 8.4 percent.

Air carriers rebounded after heavy losses in the previous session. Korean Air soared 12.1 percent and Asiana Airlines advanced 20.5 percent.


European stocks rose for a second straight session on Friday as China reported zero new domestic coronavirus cases for the second day and massive relief packages announced by global central banks and governments helped to ease fears of a global recession.

Meanwhile, the U.S. Federal Reserve said it would establish temporary swap lines with other nine central banks as part of coordinated action to improve liquidity in the financial markets.

The pan European Stoxx 600 soared 4.5 percent to 300.81 after climbing 2.9 percent in the previous session. The German DAX surged nearly 6 percent, France's CAC 40 index jumped 6.3 percent and the U.K.'s FTSE 100 rallied 3.1 percent.

Banks surged from their lowest in three decades after the Bank of England joined its European peers in suspending stress tests for 2020.

Commerzbank, Deutsche Bank, Credit Agricole and Societe Generale advanced 5-8 percent.

Dutch-based Advanced Metallurgical Group advanced 4.4 percent. The company announced that it received consents to form Shell & AMG Recycling together with Shell Catalysts & Technologies.

Food distribution company Sligro Food Group was moving lower after saying it had lost about 70-75 percent of its delivery sales because of the coronavirus crisis.

Danish business conglomerate A.P. Moller - Maersk climbed 8.3 percent after suspending its guidance for 2020.

Siemens AG shares advanced 9 percent. The engineering major said that its President and Chief Executive Officer Joe Kaeser will not be pursuing an extension of his mandate. He will be proposed as Chairman of the Supervisory Board of Siemens Energy.

Optics firm Fielmann rallied 8.5 percent. The company announced that it will temporarily shut down its regular operations of stores in Germany and Switzerland from March 20. The company is implementing additional measures to contain the Covid-19 spread.

Hamburger Hafen und Logistik Aktiengesellschaft shares soared 10 percent. The logistics and transportation firm said it expects revenues and operating result for the financial year 2020 to strongly fall below prior due to the possible temporarily sharp declines in container throughput and transport.

Semiconductor materials maker Soitec gained 5.5 percent. The company said that OCEANE 2023 holders have approved partial assets contribution for its wholly-owned subsidiary Soitec Newco 1.

British Airways' parent company IAG jumped 10 percent. The base salary of British Airways pilots will be reduced by 50 percent split over three months, the Financial Times reported.

InterContinental Hotels Group shares soared 12 percent. The company said that its Global RevPAR decreased 6 percent across January and February, with a broadly flat performance in the U.S. offset by declines in Greater China, which saw an almost 90 percent decline in February.

Investec, a specialist bank and asset manager, tumbled nearly 3 percent. The company expects lower earnings in fiscal 2020 amid challenging market conditions, mainly due to the ongoing public health and economic effects of COVID-19.

Travis Perkins advanced 13 percent after announcing that the Group's trading performance in 2020 has been in line with expectations.

Marks & Spencer Group lost 10 percent. The retailer said its quarter to date results have been adversely affected by the impact of coronavirus.

On a light day on the economic front, the euro area current account surplus increased in January on primary income and services trade, the European Central Bank reported.

The current account surplus rose to EUR 35 billion in January from EUR 33 billion in December. This was slightly above last year's surplus of EUR 34 billion.

The surplus on trade in goods fell to EUR 27 billion from EUR 31 billion, while the surplus on services trade advanced to EUR 10 billion from EUR 6 billion.

U.S. Economic Reports

At 10 am ET, the National Association of Realtors is scheduled to release its report on existing home sales in the month of February.
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