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US pre-open: Futures point to more losses as US coronavirus deaths top 4,000

By Iain Gilbert

Date: Wednesday 01 Apr 2020

US pre-open: Futures point to more losses as US coronavirus deaths top 4,000

(Sharecast News) - US futures were pointing to another dour session on Wednesday, following on from the worst first quarter in history for the Dow and S&P 500.
As of 1230 BST, Dow futures were down 3.32%, while S&P 500 and Nasdaq-100 futures had the indices opening 3.28% and 2.72% weaker, respectively.

The Dow closed 410.32 points lower on Tuesday as market participants shrugged off some strong manufacturing data out of China and wrapped up the volatile quarter, which saw the blue-chip index lose more than 23% of its value in the first three months of 2020.

Donald Trump said on Tuesday that the US should brace for a "very, very painful two weeks" as a result of the rampant coronavirus. White House officials projected between 100,000 and 240,000 virus-related deaths in the country.

"This is going to be a rough two-week period," Trump said. "When you look at night the kind of death that has been caused by this invisible enemy, it's incredible."

Trump also proposed another $2trn stimulus package, this time focused on infrastructure spending. However, it remained unclear as to whether or not it would pass Congress.

Oanda's Craig Erlam said: "Of course, when the President of the United States warns of a 'very, very painful two weeks' to come, with the White House anticipating between 100,000 and 240,000 deaths as a result of the coronavirus, it's understandable for investors to be shaken. This was always the risk of last week's rebound and we must now hope that quarantine measures bring that number considerably down.

"This is a huge change in tone from the President who has failed to grasp the true horror of the coronavirus in the past, repeatedly claiming it will be defeated very soon. As we enter a rapid acceleration phase in the US which brings enormous uncertainty, the bullish case for stock markets is a little weak and we could see the rally quickly run out of steam. We can only hope the next two weeks aren't nearly as bad as we now fear, on all accounts."

Global Covid-19 cases have now reached 862,234, while US deaths have topped 4,000.

On the macro front, total mortgage application volume increased 15.3% last week, driven entirely by refinancing, according to the Mortgage Bankers Association.

However, mortgage rates plummeted to their lowest level in the history of the MBA's survey, with the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510,400 or less) decreasing to 3.47% from 3.82%.

Still to come, ADP employment figures at 1315 BST, IHS Markit's March manufacturing PMI will be published at 1445 BST, while employment and manufacturing figures from the Institute of Supply Management will follow at 1500 BST.

In the corporate space, Dave & Busters will report earnings on Wednesday.


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