U.S. Stock Market Set To Open Flat On Hopes For Oil Production Cut DealThe potential oil production cut deal is the main intrigue for the remainder of this week.
Oil In Spotlight
The most important topic of the day is the potential oil production cut deal. Yesterday, a tweet of the U.S. President Donald Trump, in which he stated that Russia and Saudi Arabia would cut oil production, provided a huge boost to oil prices.
However, there’s no official deal, and the market can only guess how the ultimate deal could look like. Russia and Saudi Arabia could not cut production by 10 million barrels per day, and the cooperation of other oil producers will be necessary.
The potential oil production cut deal is vitally important for all oil-related stocks, from majors like Exxon Mobil or Chevron to oil services providers like Schlumberger or Halliburton.
Currently, oil prices are showing healthy gains, and it is likely that these gains will provide material support for oil-related stocks, which, in turn, could help the S&P 500 gain some ground despite the tough situation with coronavirus.
No Relief On The Coronavirus Front
The elimination of virus containment measures, which are hurting the world economy, will depend on the medical data. At this point, this data remains disappointing.
U.S. has accumulated as much as 245,573 coronavirus cases, according to data from Johns Hopkins University. Spain has more cases than the previous leader, Italy – 117,710. The number of coronavirus cases in the UK has been rising fast in recent days.
At this point, coronavirus remains the main risk for the market since current medical situation does not provide hope that all restrictions will be lifted at the end of this month. Most likely, the return to normal life will be very gradual, dealing further damage to the world economy.
U.S. Non Farm Payrolls Data Is Worse Than Expected
The U.S. Non Farm Payrolls data has just been released and showed a contraction of 701,000 compared to the consensus estimate of 100,000. The recent data on Initial Jobless Claims is a more timely gauge of the current employment situation in the U.S., but Non Farm Payrolls also indicate that the situation for workers is very challenging.
It remains to be seen whether the market will be able to shrug off another portion of negative data at the time when it is supported by rising oil prices.