Global Stocks Hold Steady After Oil-Price Jump
By Chong Koh Ping
International stocks traded little changed Friday, a day after
crude oil surged on hopes that a price war between Russia and Saudi
Arabia will ease.
By late morning in Hong Kong, stock benchmarks in Australia,
Tokyo, Hong Kong and Shanghai had risen or fallen less than 0.5%.
S&P 500 futures rose 0.8%, suggesting U.S. markets could inch
up when they open later in the day.
The yield on the 10-year U.S. Treasury note fell to 0.592%,
after settling at 0.624% in the previous session. Bond yields fall
as prices rise.
Brent crude, the global gauge of oil prices, retreated 2.8% to
$29.10 a barrel. On Thursday it leapt 21%, marking its largest
one-day percentage gain on record, based on data going back to
On Thursday, President Trump said he expected Russia and Saudi
Arabia to agree to cut production. Russia later denied talking to
the Saudis, but Saudi officials said the kingdom would consider
substantial output cuts if other nations joined the effort.
"The oil situation is going to remain quite dicey," said Eddy
Loh, senior investment strategist at Maybank Group Wealth
Management in Singapore. "While we see some negotiation
breakthroughs this week, negotiations can come on and off.
Fundamentally there's a shock to global oil demand."
Globally, the number of confirmed cases of the novel coronavirus
topped 1 million, with a death toll of more than 53,000. The U.S.
reported more than 245,000 infections and nearly 6,000 deaths,
according to Johns Hopkins University.
Mr. Loh said all eyes were on how long the containment measures
rolled out by the U.S. and other countries would last. A record 6.6
million Americans applied for unemployment benefits last
week--double the number two weeks ago--as the country shut down
parts of the economy in an effort to contain the virus.
"The longer the lockdown, the larger the damage. The fear now is
the rise of corporate bankruptcies," Mr. Loh said. "We'll be
tracking very closely whether the liquidity crisis will become a
credit crisis. And the U.S. will be the key driver here."
On Thursday, the Dow Jones Industrial Average rose 2.2% and the
S&P 500 and the Nasdaq Composite were up 2.3% and 1.7%
Despite the apparent calm Friday, Kerry Craig, a global market
strategist at JP Morgan Asset Management, said he expected the
markets to remain choppy in the near future. "A cycle of corporate
[earnings] downgrades has yet to come through," he said, adding
that consensus expectations weren't yet fully reflecting the impact
of the pandemic.
Write to Chong Koh Ping at firstname.lastname@example.org
(END) Dow Jones Newswires
April 03, 2020 00:35 ET (04:35 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.