The Friday Market Minute
- Global stocks slide, while Wall Street future slump, after President Donald Trump and First Lady Melania test positive for COVID-19.
- Trump says he’ll begin immediate quarantine, putting election campaigning, the upcoming debates and the health of his colleagues in question.
- Congressional lawmakers pass a $2.2 trillion coronavirus stimulus bill, largely down party lines, while Senate Republicans stick to their prescribed limits on spending.
- Eurozone deflation deepens amid the broader economic malaise, with core consumer prices pegged at -0.4% for the month of September.
- Oil extends slump as the dollar gains and questions over the pace of demand, amid rising U.S. inventories, continues to hit crude.
- U.S. equity futures suggest a weaker open on Wall Street after data shows U.S. employers added fewer new jobs in September.
U.S. equity futures slump lower Friday following news that President Donald Trump and First Lady Melania have both tested positive for the coronavirus, kicking markets into a tailspin ahead of key September jobs reports.
The President, who is 74 years old, Tweeted news of the positive test at around 1:00 am Eastern time Friday, and said the pair will immediately begin quarantine in the official residence of the White House.
Reports suggest the infection may have come from his top adviser, Hope Hicks, who has also taken ill from the virus that has affected more than 7 million Americans and taken the lives of more than 200,000.
Vice President Mike Pence said his last regular coronavirus test was deemed negative.
News of the positive test — and its myriad implications for the President, his cabinet, the Supreme Court nomination process and the broader election campaign — pushed markets quickly and sharply lower in overnight trading, and offset any positive momentum from the passage of the Democratically-controlled House’s $2.2 trillion coronavirus relief bill, which remains many hundreds of billions away from the limit on spending demanded by the Republican controlled Senate.
Markets were also hit by the Commerce Department’s assessment of September employment, which showed a net new 661,000 jobs were created last month, well shy of the 800,000 forecast and down from the August tally of 1.5 million.
Futures contracts tied to the Dow Jones Industrial Average suggest a 490 point opening bell decline, while those linked to the S&P 500 indicate a 60 point slide for the broader benchmark. Nasdaq Composite futures, meanwhile, are priced for a 280 point slump at the start of trading.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, jumped 0.1% higher in overnight trading to 93.80 as investors reached for safe-haven assets, while benchmark 10-year Treasury note yields slipped to 0.669%.
The moves belie what would have been broader market optimism for today’s September non-farm payroll report, which follows a stronger-than-expected ADP reading of 749,000 new jobs in the private sector and improving weekly jobless claims of 837,000.
Analysts expect a headline reading of around 850,000 when the Bureau of Labor statistics publishes the figures at 8:30 am Eastern time.
European stocks were also pulled lower, while a shockingly low reading of inflation in the world’s biggest economic block underscored the challenges faced by both EU leaders and the European Central Bank in reviving growth following the carnage of the coronavirus pandemic.
Headline inflation was pegged at -0.3% in September, while the so-called core reading, which strips out volatile food and energy prices, fell to -0.4%.
The Stoxx 600 was marked 0.72% lower in early Frankfurt trading, paced to the downside by a 1% decline for the DAX performance index in Germany. Britain’s FTSE 100, meanwhile, was marked 1% lower as the pound rose to 1.2901 against the greenback.
Global oil prices extended declines, following on from Thursday’s demand-focused slump, to trade firmly under the $40 mark amid reports of faster-than-expected OPEC production and rising domestic U.S. inventories.
WTI contracts for October delivery, the U.S. benchmark, traded $1.71 lower from their Thursday close in New York to change hands at $37.01 per barrel while Brent contracts for November, the global benchmark, were seen $1.79 lower at $39.14 per barrel.
Overnight in Asia, stocks in Tokyo resumed trading after a technical failure at the TSE closed dealing on Thursday for the first time since 1999. The Nikkei 225 benchmark ended the Friday session 0.7% lower at 23,029.90 points, while the region-wide MSCI Asia ex-Japan index was last seen -0.23% lower at 558.26 points heading into the close of trading.