US stocks close higher as investor hopes offset trade, pandemic concerns

By Jonathan Jackson. Published at May 15, 2020, in Market Wrap

ASX futures traded 45 points higher after Wall Street rebounded overnight, as investors weighed the prospect of economic recovery. The upward movement was made following remarks from US President Donald Trump over the US-China trade relationship.

In an interview with FOX Business on Thursday, Trump threatened to "cut off the whole relationship" with China and revived trade war fears, blaming China for the coronavirus outbreak.

According to Refinitiv data, the US first-quarter earnings season is in its final stretch. 451 of the companies in the S&P 500 reported earnings for the first three months of the year. Earnings have fallen by 12.1% from the first quarter 2019, a stark reversal from the 6.3% annual growth seen on 1 January.

As mandated lockdowns continue to damage the global economy, investors remain somewhat uncertain on the future of trade. The Volatility Index, known as the VIX, eased overnight after rising for most of the week and US stocks finished in the black.

While all three major US stock indexes ended the session higher, they see-sawed for much of the day. The Dow Jones rose 1.6%, the Nasdaq added 0.9% and the S&P 500 advanced 1.2% after all three indices opened lower and recovered throughout the day.

European stocks fall, Asian futures mostly higher

European equities ended the day deep in the red despite a partial recovery in the final hour of trading. The German Dax fell nearly 2% in Frankfurt, while the FTSE 100 shed 2.8% in London. The pan-European STOXX Europe 600 fell 2.2%.

The ASX fell on Thursday, with the benchmark index ASX 200 closing down 1.7% to 5,328.7 points. The Small Ordinaries dipped 1.5% as small-mid caps fared marginally better.

The big banks and miners fell sharply. The national jobless rate rose one percentage point to 6.2% in April as 600,000 jobs were lost.

In commodities, Brent Crude oil rose over 7% in overnight trade to be last traded at US$31.40 per barrel. Gold prices traded firmly higher at ~US$1,730 per ounce.

Bitcoin closed in on US$10,000, up over 5% to be last quoted at ~US$9,700.

ASX futures contracts for June traded 45 points higher this morning and it will be interesting to see if Australian stocks will be able to rally into the weekend or if investor caution prevails.

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