US stock futures fall slightly as oil declines, traders weigh on prospects for economic reopening

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The Load Bull statue is seen in the financial district of New York, the United States on March 29, 2020.

Tayfun Coskun | Anadolu Agency | Getty Images

Equity futures fell slightly on Sunday evening following the drop in oil prices, as investors assessed the possibility of reopening the global economy after the coronavirus epidemic.

The Dow Jones Industrial Average futures fell 51 points, or 0.2%. The S&P 500 and Nasdaq 100 futures contracts fell 0.2% and 0.1% respectively. West Texas Intermediate futures fell 2% at the start of the session to $ 16.60 a barrel.

Wall Street has just experienced its first weekly decline in three, when a record drop in oil prices has sent investors into a mad rush. The Dow and the S&P 500 fell more than 1% last week while the Nasdaq Composite fell 0.2%.

New York Governor Andrew Cuomo said on Sunday that the state plans to reopen its economy in stages. The first phase, Cuomo said, would involve the New York construction and manufacturing sectors. In the second phase, companies will have to design reopening plans that include social distancing and have personal protective equipment.

Cuomo also noted that hospitalizations for the coronavirus fell for 14 days and that virus deaths in New York reached a low of almost a month. These comments came when Georgia started to reopen its economy.

“As various states begin to reopen their economies and relax the social distancing rules, we will get a glimpse of what the new normal looks like,” said Marc Chaikin, CEO of Chaikin Analytics. “The biggest risk to the stock market is a premature reopening of the US economy, which translates into an increase in COVID-19 cases and necessitates a sudden reversal of these efforts to get the economy out of its artificial coma. “

On-site shelter orders and social distancing guidelines forced thousands of businesses to close as of March as federal and state governments attempted to contain the coronavirus epidemic. Nearly 3 million cases have been confirmed worldwide, including more than 900,000 in the United States, according to data from Johns Hopkins.

The epidemic and the subsequent closings of businesses triggered a wave of job losses. Department of Labor data show that more than 26 million people have applied for unemployment benefits in the past five weeks.

Admittedly, a drop in new viral infections and unprecedented monetary and fiscal stimulus have triggered a massive rally in stock markets from the lows reached on March 23. Since then, the main averages have all risen more than 20%, with the S&P 500 retracing about half of its decline from a record set on February 19.

Investors also applauded the prospects for Gildes Sciences’ remdesivir as a potential treatment for coronavirus. On April 16, STAT News reported that patients at a Chicago hospital with severe symptoms of coronavirus recovered quickly after being treated with the drug in a trial.

A report from the Financial Times on Wednesday, however, dispelled some of the excitement, as it said that remdesivir did not improve the condition of patients in a trial in China. Gilead rejected the report and the study he cited, noting that the trial had been “halted prematurely due to the low number of registrations,” making him “malnourished to allow statistically significant conclusions.”

“This drug has become the most important macro topic / theme / trend on the market overall,” said Adam Crisafulli, founder of Vital Knowledge. “Investors reject FT flop” title and continue to anticipate positive results of some sort (at least) from one of many Remdesivir trials currently underway (while FDA approval is largely assumed). “

“The current configuration is such that the anticipation of Remdesivir will most likely be more beneficial / powerful than the actual results themselves (the data will likely show effectiveness to some extent in some cases, but a medical” quick fix “n ‘is not about to emerge)’, added Crisafulli.

—Michael Bloom of CNBC contributed to this report.

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