Asian stocks were mixed in early trading as investors scoured earnings reports for evidence of the impact of the coronavirus outbreak. The dollar held its retreat.
Japanese stocks slipped while shares in Sydney opened modestly higher. Contracts on the S&P 500 edged lower after the U.S. gauge jumped to a one-month high on Tuesday. Giant technology stocks earlier pushed the Nasdaq 100 through its 50, 100 and 200-day moving averages. Johnson & Johnson surged after posting stronger sales and boosting its quarterly dividend. Meanwhile, JPMorgan Chase & Co. and Wells Fargo & Co. slumped as their profits were hit by major provisions. Treasury yields slipped and the yen edged higher.
The earnings season should provide more of a sense of how bad the pandemic will be for global companies after the International Monetary Fund said the “Great Lockdown” recession would be the steepest in almost a century. Investor pessimism over the economic damage of the pandemic is at “extreme” levels with cash positions at the highest since the 9/11 terrorist attacks, according to a Bank of America survey.
“It’s really going to be about forward guidance,” Erin Gibbs, president and CEO at Gibbs Wealth Management LLC, said on Bloomberg TV. “What we’re really going to be looking for is, are companies giving us an idea of when they think they’ll return to profitability, or, are they talking about more layoffs?”
President Donald Trump said he will make some “important announcements” in the next few days regarding state guidelines on reopening the U.S. economy. Separately, National Institute of Allergy and Infectious Diseases Director Anthony Fauci said that a May 1 target to reopen is “a bit overly optimistic” for many areas of the country.
“In the early fall, or late summer, we need to start really seeing the economy get back into a more normal mode,” Howard Ward, chief investment officer of growth equities at Gabelli Funds LLC, said on Bloomberg TV. “The big risk, and the one thing that would send the market down to new lows, is a May 1, or a premature opening of the economy.”
Elsewhere, oil climbed, clawing back some of Tuesday’s slide. Gold was little changed.
