(Reuters) – Wall Street was set to open slightly higher on Monday as President Donald Trump followed last week’s massive fiscal stimulus by extending his stay-at-home guidelines, leaving investors guessing at their economic impact.
NYSE-AMEX Options floor traders from TradeMas Inc. work in an off-site trading office built when the New York Stock Exchange (NYSE) closed, due to the outbreak of the coronavirus disease (COVID-19), in the Brooklyn borough of New York City, U.S., March 26, 2020. REUTERS/Brendan McDermid
All three major stock indexes, however, ended Friday more than 3% lower after the United States overtook China as the country with the most number of coronavirus cases.
The crisis has so far knocked $7.4 trillion off the value of S&P 500 companies and without any clarity on how long it will take to quell the outbreak, Wall Street’s main indicators of future volatility remain at high levels.
“There is no way to gauge the short-term direction of markets right now when there is still so much uncertainty,” said David Bahnsen, chief investment officer of Bahnsen Group in California.
“The shape of the inevitable economic recovery is unknown and will be for weeks or months.”
Trump on Sunday dropped a hotly criticized plan to get the economy up and running again by mid-April after White House health experts argued strongly with him to extend the stay-at-home order so the country could start seeing the rates of infection come down.
JPMorgan Chase & Co (JPM.N) said on Saturday it expected real U.S. gross domestic product (GDP) to fall 10% in the first quarter and plunge 25% in the second quarter.
The CBOE volatility index dipped on Monday, but was still near levels far above those in 2018 and 2019.
“Until we’ve got some evidence that can help deal with the virus, it’s probably more choppy markets ahead,” said Noah Hamman, chief executive office of AdvisorShares in Bethesda, Maryland.
At 08:41 a.m. ET, Dow e-minis 1YMcv1 were up 139 points, or 0.65%, S&P 500 e-minis EScv1 were up 23.5 points, or 0.92% and Nasdaq 100 e-minis NQcv1 were up 78.25 points, or 1.03%.
Johnson & Johnson (JNJ.N) rose 4.5% as the drugmaker announced plans to start human testing of its experimental coronavirus vaccine by September
Abbott Laboratories (ABT.N) was the top gainer among S&P 500 components, rising nearly 10% after it won U.S. approval for a diagnostic test that can detect coronavirus in minutes.
General Motors Co (GM.N) rose 5% as Trump praised the automaker’s ventilator production after he invoked emergency powers to compel the manufacturing of badly needed equipment to tackle the pandemic.
Reporting by Uday Sampath and Medha Singh in Bengaluru; Editing by Shounak Dasgupta, Sagarika Jasinghani and Anil D’Silva