U.S. Stocks Set To Open Higher As Some European Countries Start Reopening Their Economies

Spain And Austria Let Some Businesses Get Back To Work

S&P 500 futures are gaining more than 1% in premarket trading action as investors cheer the first signs of the end of the lockdown nightmare.

Spain has allowed some workers to get back to their jobs after a multi-week lockdown. According to data from Johns Hopkins University, the country has accumulated 172,541 coronavirus cases and ranks second behind the U.S. which has 582,594 cases.

Austria also decided to let some businesses open as the virus appeared to be in control. The country will start by reopening smaller shops, and then proceed to shopping centers from May 1. It is possible that restaurants and hotels will reopen from mid-May.

In the U.S., Donald Trump indicated that the plan on how to reopen the U.S. economy would be ready soon. Currently, the country is expected to live with strict virus containment measures until the end of April, and the pace of reopening the economy will depend on the virus data.

The Earnings Season Begins

As I wrote earlier, the market is set to digest bank earnings this week. JPMorgan has just reported its first quarter results, missing analyst estimates on both earnings and revenue.

The bank reported profit of $0.78 per share compared to analyst consensus estimate of $2.20 per share as the bank increased its reserves by $6.8 billion in preparation for the negative impact of coronavirus.

Wells Fargo also missed analyst estimates for the same reason – the bank decided to increase its reserves by $3.1 billion. Clearly, we will see roughly the same picture in the subsequent reports of other banks.

Oil Continues To Move Lower

Oil prices are once again under pressure despite the historic oil production cut deal. While many other asset classes are in a rally mode, oil has to deal with real-life consequences of virus containment measures.

While major banks like JPMorgan and Wells Fargo point to a higher open in premarket trading action and support broader market strength, the weakness in oil could have a negative impact on the general market later in the trading session.

It will be interesting to see whether major oil stocks like Chevron or Exxon Mobil will be able to sustain their recent gains at times when oil prices are near lows.