Australian stocks look set to open cautiously higher amid tentative signs that the spread of the coronavirus may be slowing.
Index futures point to an opening rise of 46 points or around 0.9 per cent, but the market direction will likely be set by the reaction to a weekend of mixed reports on the pandemic that has torpedoed financial markets. A delay in a virtual meeting of major oil producers originally scheduled for tonight may also dampen the outlook following reports of internal disagreement.
While the US braces for what its Surgeon General warns will be the "hardest and saddest week of most Americans' lives", other parts of the world showed signs of improvement. The number of new cases reported in Australia yesterday was 139, the lowest in days. Chief Medical Officer Brendan Murphy said, "That is probably the lowest rise we've had for a few days and it does tend to continue the trend we've seen of flattening the curve." Victoria's chief health officer said for the first time he had "a little bit of optimism that we can actually beat this."
Europe's hardest-hit nations also showed evidence of a turnaround. The daily death toll in Italy was the lowest in two weeks. The death rate in Spain declined for a third day. France also recorded a drop in deaths.
The S&P/ASX 200 fell for the final two sessions of last week, but still managed its biggest weekly gain since 2011. Declines of 1.7 per cent on Friday and 2 per cent on Thursday trimmed the weekly tally to 4.6 per cent.
The local market appeared to be released last week from its slavish mirroring of US price movements. The S&P 500 shed 2.1 per cent last week after another sell-off on Friday. The benchmark US index gave up 38 points or 1.51 per cent after the nation's run of 113 months of rising jobs growth came to a crashing halt. The Dow gave up 361 points or 1.69 per cent and the Nasdaq 114 points or 1.53 per cent.
US payrolls slumped by 701,000 last month, the worst result since 2009. However, the Labor Department figures were a mere taster of what lies ahead because they only covered the first half of the month before lockdowns threw millions more out of work. The official unemployment rate jumped from 3.5 per cent to 4.4 per cent. Economists said the true rate by the end of the month was likely closer to 10 per cent.
The defensive consumer staples was the only sector to advance on Friday, rising 0.5 per cent. Utilities, materials financials were the biggest losers, falling between 2.2 and 3.6 per cent.
The energy sector dropped 1.3 per cent despite strong gains in crude ahead of a virtual meeting of major producers this week. The Organization of the Petroleum Exporting Countries and its allies were due to discuss production cuts of at least six million barrels a day, according to a Wall Street Journal report. On Friday, Brent crude surged $4.17 or 13.9 per cent to settle at US$34.11 a barrel, extending a 21 per cent bounce on Thursday.
The mood towards Australia's largest miners deteriorated as the session wore on. BHP's US-listed stock dived 3.46 per cent after its UK-listed stock lost 1.41 per cent. Rio Tinto lost 2.11 per cent in the US after rising 1.06 per cent in the UK. The spot price for iron ore landed in China eased 85 cents or 1 per cent to US$82.65 a dry ton.
Gold got a leg-up from grim US jobs data. Gold for June delivery settled $8 or 0.5 per cent ahead at US$1,645.70 an ounce.
Aluminium hit a four-year low during a soft session on the London Metal Exchange. Benchmark aluminium dropped 0.7 per cent to US$1,448.10 a tonne, a level last seen in March 2016. Copper shed 1.1 per cent, nickel 0.7 per cent, lead 2.7 per cent, zinc 0.3 per cent and tin 1.7 per cent.
The dollar edged up 0.22 per cent this morning to 60.08 US cents.
The local market enters a new week in a fog of uncertainty as investors try to work out whether the worst of the sell-off is behind us. The run-up to the Easter break brings several economic reports, none of which is expected to be uplifting. March job ad figures are expected today and a measure of services activity tomorrow. The Reserve Bank meets tomorrow but is not expected to announce any new measures after a series of dramatic interventions over the last month. The government is due to release modelling tomorrow on the spread of the virus. For many investors, the four-day Easter break cannot come soon enough.
Note: an earlier version of this article said the OPEC+ virtual meeting would take place tonight. The article has been updated to reflect a delay announced over the weekend.