By Lorcan Roche Kelly
Weekly jobless claims published at 8:30 a.m. Eastern Time are expected to drop to a still-terrifying 3.5 million for the week ended Apr. 25, bringing the six-week total to close to 30 million. A report from McKinsey & Co. says the pandemic shutdown will hurt 57 million U.S. workers once reduced hours and furloughs are taken into account. Already this morning there was bad news on the health of the euro-area economy, with growth in the region plunging into a record contraction in the first quarter as Spain and France saw their economies shrink more than 5%. Germany reported a 373,000 surge in unemployment claims in April.
The dire news on the economy in the euro area combined with data this morning showing inflation this month dropped to 0.4% is likely to focus minds at the European Central Bank as officials meet to make their latest monetary policy decision. Even though policy makers have already announced asset purchases this year of more than 1 trillion euros ($1.1 trillion), economists surveyed by Bloomberg expect another 500 billion euros of purchases to be announced this year. Goldman Sachs Group Inc. says a bump up in stimulus could come today. The decision is published at 7:45 a.m., followed by a press conference at 8:30 a.m.
Tech companies continue to outperform during the lockdown, with strong results from Facebook Inc., Microsoft Corp. and others putting the Nasdaq Composite on track to erase losses for the year. Tesla Inc. shares are over 8% higher in pre-market trading after the company beat expectations on profit for the first quarter. Apple Inc., Amazon.com Inc. and Twitter Inc. continue the tech theme when they report.
Earnings season and hopes of an effective treatment for coronavirus are dominating market sentiment, with investors mostly looking past growth and employment data. Overnight, the MCSI Asia Pacific Index gained 1.3% while Japan’s Topix index closed 1% higher. In Europe, the Stoxx 600 Index was unchanged at 5:50 a.m. as banks took a hit after worse-than-expected results from some of the region’s biggest lenders. S&P 500 futures pointed to a small rise at the open, the 10-year Treasury yield was at 0.612% and oil continued its strong performance.
The March PCE report is expected to show the biggest drop in spending on record when it is released at 8:30 a.m. MNI Chicago PMI and Bloomberg consumer comfort for April are at 9:45 a.m. The White House may announce plans for loans to help the oil industry today. In non-tech earnings, McDonald’s Corp., Gilead Sciences Inc., Kraft Heinz Co., United Airlines Holdings Inc. and American Airlines Group Inc. are among the many companies reporting today.