New York Stock Exchange building is seen at the Financial District in New York City, United States on March 29, 2020.
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9:47 am: Here are Wednesday’s biggest analyst calls of the day: Snap, Tripadvisor, Pinterest & more
- Citi downgraded Snap to sell from neutral.
- Raymond James upgraded American Eagle to outperform from market perform.
- DA Davidson downgraded Pinterest to neutral from buy.
- Deutsche Bank downgraded Tripadvisor to hold from buy. —Bloom
9:42 am: Bond yields up after Treasury says issuing more new 20-year bonds than expected
The Treasury is bringing back the 20-year bond for the first time in 34 years, and it surprised the market with an even bigger rollout than expected. Strategists said the Treasury is moving faster to extend the duration of U.S. debt, which is ballooning with the trillions the government is spending in response to the coronavirus. The Treasury also added more issuance in other categories, including the 10-year, raising auction sizes for the notes by $5 billion to $32 billion. That helped send yields higher across the curve but more so at the long end. The 10-year was yielding 0.71%, its highest since April 15.
“For the 20-year, the range people were expecting was $13 billion to $15 billion, and it came in at $20 billion,” said John Briggs, head of strategy at NatWest Markets. Strategists say the new issue should be attractive to pensions and insurers looking for longer duration debt. Also, strategists say the very low yield on the 10-year may send some investors into the 20-year, offering even slightly more yield.
The Treasury is immediately funding virus spending with T-bills, which have a duration of up to 12 months, and Briggs said bill issuance will soon be about $1.8 trillion larger than in March. The market is now watching how quickly the government will move to replace that short term debt with longer dated instruments. —Domm
9:30 am: Stocks open higher despite historic jobs report
Stocks opened higher on Wednesday, with all three indexes looking to make their third straight day of gains. The Dow rose about 170 points, or 0.7%. Stocks that would benefit from a quicker than expected reopening, including airlines and cruise lines, rose in early trading. The moves follow an ADP jobs report that showed 20.2 million job losses in April. —Pound
8:33 am: Fed’s James Bullard says Friday’s jobs report will be one of the worst in history
St. Louis Federal Reserve President James Bullard said Wednesday that the April jobs report on Friday will likely be one of the worst in history. “I’ve long maintained that the main impact here will be in the second quarter, the negative impact. We’re going to see crazy ADP numbers today and the jobs report will probably be one of the worst ever on Friday,” Bullard told CNBC’s Steve Liesman. “But that’s kind of expected because you’re using the unemployment insurance program to provide pandemic relief,” he added. “That’s exactly what we want to do.”
ADP data on Wednesday showed private payrolls slashed more than 20 million jobs in April amid widespread shutdowns aimed to contain the spread of the coronavirus. – Li, Franck
8:31 am: ADP report shows private payrolls drop of 20.2 million
The latest private payrolls report from ADP and Moody’s Analytics showed private payrolls were slashed by 20.2 million in April as the coronavirus pandemic forced employers of all sizes to lay off people. The print is the worst in the survey’s history going back to 2002. Still, it was slightly better than the Dow Jones estimate of a 22 million payroll reduction. – Imbert, Cox
8:11 am: Oil turns lower, jeopardizing five session winning streak
Oil prices turned lower in early trading on the East Coast as oversupply fears counteracted optimism about economies around the world reopening. West Texas Intermediate slipped 1.75% to trade at $24.13 per barrel, after earlier hitting a session high of $26.08. International benchmark Brent crude shed 21 cents to trade at $30.76 per barrel. Both contracts have posted gains over the last five sessions amid claims that demand for oil may have bottomed. – Stevens
8:07 am: Trump warns ‘more death’ ahead from coronavirus
President Donald Trump said the choice to reopen and jumpstart the economy could inevitably cost some Americans their lives. “It’s possible there will be some [deaths] because you won’t be locked into an apartment or house or whatever it is,” Trump told ABC’s David Muir in a rare network news interview. “There’ll be more death, that the virus will pass, with or without a vaccine. And I think we’re doing very well on the vaccines but, with or without a vaccine, it’s going to pass, and we’re going to be back to normal,” Trump said. –Li
8:02 am: Activision Blizzard jumps after earnings
Shares of Activision Blizzard gained more than 6% during Wednesday’s premarket trading after the company beat top and bottom-line estimates in the first quarter. The video game maker earned an adjusted 76 cents per share, well above the consensus estimate of 38 cents, with revenue also topping estimates. The company said it saw better-than-expected results from key franchises “as populations sheltering at home turned to our content for entertainment and social connection.” Activision also gave an upbeat outlook for 2020. Shares have gained 15% this year, while the S&P 500 has dropped 11%. –Stevens
7:50 am: Disney slides after suspending dividend
Disney announced that is was suspending its dividend for the first half of the fiscal year after reporting weaker than expected earnings per share for its fiscal second quarter. Revenue for the company’s parks segment was down 10%. The company’s theme parks around the world have been closed due to the coronavirus, but Disney said it is planning to reopen its Shanghai park on May 11. The stock has fallen 1.5% in extended trading. —Pound
7:43 am: Coronavirus cases in the US top 1.2 million
More than 1.2 million people in the U.S. have been infected by the coronavirus as of Wednesday, with the death toll climbing to 71,000, according to data from Johns Hopkins University. Globally, more than 3.65 million cases have been confirmed and over 256,800 people have lost their lives. Some countries are experiencing an increase in infections. Spain’s daily death toll rose to 244 fatalities following three straight days of less than 200 reported deaths per day, the country’s health ministry reported on Wednesday. Meanwhile, Singapore reported another 788 cases of the coronavirus, bringing the country’s total number of infections to 20,198 since the outbreak. –Li
7:33 am: Oil rises for sixth straight day
Oil prices moved higher on Wednesday for the sixth straight day of gains as economies around the world reopening counteracted an ongoing supply glut. West Texas Intermediate, the U.S. benchmark, gained 76 cents, or 3.09%, to trade at $25.32 per barrel, while international benchmark Brent crude traded 2.2% higher at $31.66 per barrel. Energy stocks were higher in premarket trading on the heels of oil’s advance, with the XLE, which tracks the sector, posting a gain of nearly 2%. Exxon and Chevron were up 1.3% and 1.5%, respectively. –Stevens
7:31 am: CVS shares jump after first quarter results
Shares of CVS gained more than 4% in premarket trading after the company said revenue in the first quarter rose 8% year-over-year as consumers rushed to stock up on staples amid the coronavirus pandemic. The drugstore chain reported adjusted earnings per share of $1.91 and $66.8 billion in revenue. CVS has stayed open during the pandemic, and in March said it was planning to hire 50,000 people in various roles in an effort to meet demand. –Stevens
7:26 am: ADP expected to show 22 million private sector jobs lost
ADP data is expected to show the loss of 22 million private payrolls in April, about the same economists expect to see lost in Friday’s government jobs report. The 8:15 a.m. report is a helpful guide for what might be in the important April employment report, also expected to show unemployment at 16.1%. ADP has not always been an accurate reflection of the overall government report but it does give helpful insight into the private sector workforce, including small businesses. —Domm
7:23 am: Stock futures point to a third day of gains
U.S. stock futures rose on Wednesday, putting Wall Street on pace for its third straight day of gains as traders continue to bet on the economy reopening soon. Dow Jones Industrial Average futures were up 187 points, or 0.8%. S&P 500 and Nasdaq 100 futures both traded 0.7% higher. Crude prices were also up for a sixth day in a row. President Donald Trump said Tuesday that “there’ll be more death” from the coronavirus, but added that not reopening businesses would also cost people their lives in other ways. —Imbert
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