Top 5 Things to Know in the Market on Thursday, April 9th 2020
Another 5.25 million Americans are expected to have filed for jobless benefits last week. The numbers are out at 8:30 AM ET (1230 GMT). OPEC and Russia will meet to thrash out a possible cut of some 10 million barrels a day in output - but any agreement will likely be conditional on some form of contribution from the U.S. Stocks are set to open mostly lower after a late surge on hopes of a peak in virus cases in New York, while the U.K. is set to start borrowing directly from the Bank of England - and neither the pound nor the bond market seems to mind. Here's what you need to know in financial markets on Thursday, April 9th.
1. Get your hard hat on - it's time for U.S. jobless claims again
It’s jobless claims day again. The Labor Department releases its weekly figures for initial claims at 8:30 AM ET (1230 GMT), and analysts predict only a modest drop to 5.25 million from last week’s record of 6.65 million.
If that’s borne out (and watch for revisions to the previous week’s data), then over 15 million Americans will have filed for jobless benefits in the last three weeks.
The U.S. isn’t alone in seeing such record figures though. The German Federal Labor Office said that the number of companies applying for government wage subsidies had risen 40% to 650,000. As such, over 1 million companies have applied in the last two weeks.
2. 'OPEC+' ministers to discuss radical output cut
The world’s major oil exporters will meet by videoconference link at 10 AM ET (1400 GMT) to discuss a radical cut in output to stabilize world markets.
Crude prices rose overnight after Algeria’s oil minister – a bit-part player in what is essentially a three-way fight for market share between Saudi Arabia, Russia and the U.S. – said cuts of 10 million barrels a day were possible. By 6:35 AM ET,US Crude futures were up 6.1% at $26.62, while Brent futures were up 4.2% at $34.23, their highest in a month.
Any agreement will likely be conditional on some form of output cut by other large producers such as the U.S., Brazil and Canada. The energy ministers of the G20 will meet on Friday to try to agree a formula to cement any deal.
The key variable remains whether Russia and Saudi Arabia accept at face value projections by the U.S. government that U.S. output will fall by some 1.2 million barrels a day by the end of this year due to market forces alone.
3. Stocks set to open mostly lower; Michigan consumer sentiment due
3 U.S. stocks are set to open moderately lower, with caution the watchword ahead of the jobless numbers.
By 6:35 AM ET (1035 GMT), the Dow Jones 30 Futures contract was down 73 points, or 0.3% at 23,152 points. The S&P 500 Futures contract was down 0.5% and the Nasdaq 100 Futures contract was down 0.6%. The main indices had risen over 3% on Wednesday after New York Governor Andrew Cuomo emboldened hopes that the virus will soon peak in his state.
The dollar index was down 0.2% at 99.99.
In addition to the jobless claims numbers, the University of Michigan’s consumer sentiment index at 10 AM will also flesh out the economic situation
4. Disney 's streaming services streaks ahead
Walt Disney (NYSE:DIS) said its Disney+ streaming service had reached the 50 million subscriber mark, putting it on course to meet medium-term targets with time to spare.
That follows the rollout of the service in eight European countries in recent weeks, including France and the U.K.
The company had said it expects to have between 60 and 90 million paid subs by the end of its fiscal 2024 year.
The service, which can be bundled with Hulu and ESPN+, is the centrepiece of Disney’s pivot away from linear TV programming, and as such essential to its long-term future. The company’s shares rose 7% in response to the news, which was released after the closing bell on Wednesday.
5. British money printer go "BRRRRR!" - and markets shrug
The U.K. government said it will increase its direct borrowing from the Bank of England, allowing it to raise money without overloading the bond market.
However, the news failed to provoke the kind of sell-off that those who predict the result of the pandemic will be a splurge of inflationary money printing. The prospect of lower short-term supply allowed Gilt prices to rise on Thursday, pushing yields down by around 4 basis points for short and medium maturities, and by 6-7 basis points for longer ones.
The pound, meanwhile, rose against both the dollar and the euro . Gold bugs liked the news, though, pushing Gold Futures prices up 1.3% back above the $1,700/oz mark.
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