U.S. Stocks Set To Open Lower As China’s Wuhan Registers New Cases Of CoronavirusS&P 500 futures are pointing to a lower open as fears about potential resurgence of coronavirus in China and South Korea offset reports about an additional coronavirus aid package in the U.S.
New Coronavirus Cases In Wuhan And A New Outbreak In South Korea Test The Recent Market Optimism
S&P 500 futures are losing more than 1% during the premarket trading session as optimism about the reopening of the world economies is kept in check by new virus cases in China’s Wuhan and South Korea.
The stocks have enjoyed major upside since mid-March lows on hopes that unprecedented stimulus from central banks and governments will ensure a rapid recovery from the coronavirus crisis.
News about the new cases in China’s Wuhan, which was the epicenter of the coronavirus outbreak, remind traders and investors that it may be hard to control the virus before a vaccine is made and that the reopening of the world economies may take more time than expected.
South Korea reported 34 new coronavirus cases on Sunday, and the outbreak was tied to several clubs and bars. South Korea was, perhaps, the most successful country in the battle against coronavirus, and this outrbreak is especially disturbing for those who hope that the world’s services industry will be able to quicky recover once the virus containment measures are lifted.
U.S. Considers Additional Coronavirus Aid
The U.S. will provide its new Initial Jobless Claims report on Thursday, May 14. Analysts expect that the report will show that 2.5 million Americans filed for unemployment benefits in a week.
If this forecast is correct, the total number of Americans who have filed for unemployment benefits during the current crisis would exceed 35 million.
While some of these employees have already found new jobs in areas which were not hit hard by coronavirus, the job losses are unprecedented, and it is clear that more aid will be necessary.
It remains to be seen whether the market will buy into “more stimulus” news as the size and the contents of the new stimulus package are unknown.
Saudi Arabia May Voluntary Cut Oil Production More Than Expected
Oil has recently gained ground on reports that Saudi Arabia may voluntary cut oil production by 1 million barrels per day (bpd) more than agreed under the recent OPEC+ production cut deal.
The details of this decision are unknown at this point, but a potential oil price rally could provide some support for the stock market which is upset by worrying news on the coronavirus front.