By Peter Nurse
Investing.com - U.S. stocks are set to open mixed Tuesday, amid reports that Washington is already preparing another package of economic support measures, only days after enacting the last one.
Bloomberg cited unnamed sources as putting the size of the new bill at around $600 billion, compared to $2.2 trillion for the 'phase 3' package passed last week.
“The fourth bill would be about recovery,” House Speaker Nancy Pelosi told reporters on a Monday press call. “We would like to see in what comes next something that has always been nonpartisan ... and that would be an infrastructure piece that takes us into the future.”
The need for further economic help was laid bare by the latest research note from Goldman Sachs (NYSE:GS).
The U.S. investment bank expects the U.S. economy to shrink an annualized 34% in the second quarter, compared with an earlier estimate of 24%, economists led by Jan Hatzius wrote in a report. Unemployment will soar to 15% by mid-year, up from a previous forecast of 9%, they wrote.
The U.S. is rapidly taking over from Europe as the global epicenter of the Covid-19 pandemic, with 164,610 confirmed cases and a death toll of 3,170 that is still rising quickly. New York City alone has 67,000 cases and has registered 1,342 deaths, according to Johns Hopkins.
Maryland, Virginia and Washington D.C. all enacted tighter restrictions on non-essential movement and business on Monday.
At 7:15 AM ET (1115 GMT), futures for the S&P 500 traded 8 points, or 0.3%, lower, futures for the Nasdaq were flat, while the Dow futures contract fell 33 points, or 0.2%.
Despite the recent rally, the slump from the mid-February record highs has set the Dow Jones Industrial Average on course for its worst first quarter ever, while the S&P 500 is on track for its worst since 1938. The tech-heavy Nasdaq is set to close out its worst first three months of the year since 2008.
China's official Purchasing Managers' Index rose to 52 in March, above the 50-point mark that separates monthly growth from contraction, rebounding from a plunge to a record low of 35.7 in February.
At the same time, Volkswagen (DE:VOWG_p) stated that it expects vehicle sales in China, the world's largest car market, to quadruple in March, pointing to a recovery following the coronavirus pandemic.
News indicating that China, where the coronavirus pandemic started, may be getting on top of the outbreak has buoyed spirits as it gives an expected time frame for investors to consider.
In corporate news, Ford Motor (NYSE:F) and GE (NYSE:GE) Healthcare announced plans to produce 50,000 ventilators within the next 100 days to assist with the coronavirus pandemic.
RH shares dropped 11% pre-market after the parent company of Restoration Hardware reported fiscal fourth-quarter revenue and net income that fell far short of Wall Street estimates.
The U.S. Redbook is due for release at 8:55 AM ET (12:55 GMT), but of more interest will be the March Chicago PMI, at 9:45 AM ET, and then the Conference Board consumer confidence release, at 10 AM ET.
Oil bounced Tuesday, after falling to an 18-year low Monday, after the United States and Russia agreed to discuss stabilizing energy markets, albeit expectations of a near-term deal remain low.
At 7:15 AM, U.S. crude futures traded 7.6% higher at $21.61 a barrel. The international benchmark Brent contract rose 4.2% to $27.52.
Additionally, gold futures dropped 1.9% to $1,612.40/oz, while EUR/USD traded at $1.0932, down 1%, as the dollar was supported by technical accounting-related factors related to the end of the Japanese financial year.