Stock futures rose in early morning trading Tuesday as investors grew more optimistic about the coronavirus outlook while bracing for the start of the corporate earnings season.
As of around 6:43 a.m. ET, futures on the Dow Jones Industrial Average were up 303 points, pointing to an opening gain of about 336 points. S&P 500 and Nasdaq futures also pointed to solid Tuesday opening gains.
“When you look at the facts, I think there’s reason to be more hopeful than we have been,” CNBC’s Jim Cramer said. “The worst case scenario’s been taken off the table, and if Apple and Google can do contact tracing that we all embrace … while we continue to roll out more testing, the economy could reopen a lot sooner than we thought even, say, three weeks ago.”
President Donald Trump said in a press conference Monday that growth in new coronavirus infections stabilized, providing “clear evidence” that mitigation is working in the country.
New York Gov. Andrew Cuomo struck an optimistic tone about the outbreak in New York state, the epicenter of the pandemic in the United States. He said Monday it appears that “the worst is over … if we continue to be smart going forward.” At least 10,000 people have died from the infection in the state.
To be sure, the number of coronavirus cases continues to rise globally. Data from Johns Hopkins University shows there are more than 1.9 million cases around the world, with over 582,000 in the U.S.
The corporate earnings season kicked off on Tuesday with JPMorgan Chase and Johnson and Johnson reporting their latest quarterly results, giving investors their first look at how devastating the hit to corporations has been from the pandemic.
Analysts expect S&P 500 earnings growth to decline 10.2% in the first quarter year-over-ear, according to Refinitiv. There is also an unusually wide range of estimates given the unprecedented uncertainty from the coronavirus.
“Even the lowered forecast may prove optimistic given some analysts have not adjusted numbers since mid-March in response to the lockdowns in many major cities throughout the country,” said Jeff Buchbinder, equity strategist for LPL Financial.
For the first quarter, 88 negative earnings pre-announcements have been issued by S&P 500 corporations, according to Refinitiv. A wave of major companies have already withdrawn their full-year guidance.
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