From a peak of 3,393 in mid-February, the S&P 500 had sank about 1,200 points, or roughly 35%, to a trough of 2,191 on this Monday. From there, though, the S&P had seen a sharp rebound rally that took it back to a level of 2,637 yesterday for a move of about 20% in just three sessions. There has been some profit taking today to cut into the week's gains ahead of what will be a heavy week upcoming in terms of economic releases. These will include some of the first major economic reports that will capture effects from the March pandemic, the economic shutdowns, and the financial market collapse. The jobs report should illustrate some of the early disruptions from the crisis, vehicle sales likely plunged with a sharp drop in buyer traffic, and the ISM and ISM-NMI indexes are both likely to fall.
ECONOMIC EVENTS: In U.S. data, personal income climbed 0.6% in February, with spending rising 0.2%. The final University of Michigan consumer sentiment report for March revealed a downwardly-revised drop to a three-year low of 89.1. The preliminary reading had been 95.9, and that was already down sharply from a two-year high reading of 101.0 in February.
In political news, the House passed the $2T stimulus bill that had been approved yesterday by the Senate, sending it on to be signed by the President. President Trump announced in a tweet that he will be signing the bill into law at 4 pm ET today.
Meanwhile, the latest data from the Johns Hopkins Whiting School of Engineering shows there are now 585,040 confirmed cases of COVID-19 and 26,819 deaths due to the disease. Also, the 97,028 confirmed cases in the U.S. place it ahead of Italy, China, and Spain in terms of being the country with the highest case count.
TOP NEWS: General Motors (GM) and Ford (F) bore the brunt of the president's frustration as both automakers were instructed to speed up production of ventilators in a series of tweets. President Donald Trump said that "as usual with 'this' General Motors, things just never seem to work out. They said they were going to give us 40,000 much needed Ventilators, 'very quickly'. Now they are saying it will only be 6000, in late April, and they want top dollar. Always a mess with Mary B." He then added that GM "must" start making ventilators "now" and Ford should "get going on ventialtors, fast," while making an unclear reference to invoking the Defense Production Act.
After the tweetstorm, Ventec Life Systems announced General Motors will build VOCSN critical care ventilators at GM's Kokomo, Indiana manufacturing facility with FDA-cleared ventilators scheduled to ship as soon as next month. "Depending on the needs of the federal government, Ventec and GM are poised to deliver the first ventilators next month and ramp up to a manufacturing capacity of more than 10,000 critical care ventilators per month with the infrastructure and capability to scale further," the companies reported. Meanwhile, Ford VP of Communications Mark Truby tweeted a company statement that reads in part: "Ford is pulling out all the stops to quickly and safely provide vitally needed equipment for patients, first responders and healthcare workers...We have team working flat-out with GE Healthcare to boost production of simplified ventilators, and with 3M to increase the production of powered air purifying respirators."
Apple, in partnership with the CDC, has launched a tool to help users "understand what to do next about COVID-19." The site states: "Let's all look out for each other by knowing our status, trying not to infect others, and reserving care for those in need."
Shares of cruise lines were among the worst performers on the S&P as it became clearer that they will not qualify for aid under the roughly $2T coronavirus stimulus package. The bill limits aid to U.S.-incorporated companies with a majority of workers based in the U.S., which are two criteria that effectively exclude major cruiseship operators including Carnival (CCL), Norwegian Cruise Line Holdings (NCLH) and Royal Caribbean (RCL).
MAJOR MOVERS: Among the noteworthy gainers was Colgate-Palmolive (CL), which rose 2.3% after SunTrust analyst William Chappell upgraded the stock to Buy on his thesis that COVID-19 will not only improve global hygiene today but "permanently alter" consumers' hygiene practices. Also higher was SmileDirectClub (SDC), which advanced 13.4% after the company announced it has begun 3D printing medical-grade face shields for healthcare workers amidst the COVID-19 pandemic.
Among the notable losers was BGC Partners (BGCP), which dropped 25.8% after the company said it expects to reduce its quarterly dividend to 1c per common share. Raymond James analyst Patrick O'Shaughnessy downgraded BGC Partners two notches, to Market Perform from Strong Buy, stating that he was "surprised by and concerned with" the decision to slash the firm's quarterly dividend as he said that the cut, combined with drawing down the firm's revolver, makes him question whether there are risks to BGC's business model that he had not previously considered.
Also lower was American Airlines (AAL), which fell 10.3% after it announced that it will suspend 60% of its capacity in April as compared to the same period in 2019 and is planning to suspend up to 80% of its capacity in May compared to the same period in 2019.
Additionally, United Airlines (UAL) said that it will not conduct involuntary furloughs or pay cuts in the U.S. before September 30 following the passage of the "decisive, bipartisan" CARES Act. However, United noted that its April schedule is already cut by more than 60% and it is currently planning to make "even deeper cuts" in May and June.
INDEXES: The Dow was down 915.39, or 4.06%, to 21,636.78, the Nasdaq was down 295.16, or 3.79%, to 7,502.38, and the S&P 500 was down 88.60, or 3.37%, to 2,541.47.
General Motors
-1.17 (-5.19%)
Ford
-0.07 (-1.33%)
Apple
-10.74 (-4.16%)
Carnival
-3.38 (-19.00%)
Royal Caribbean
-6.14 (-15.11%)
Norwegian Cruise Line
-3.68 (-23.44%)
Colgate-Palmolive
+1.45 (+2.27%)
GameStop
-0.19 (-4.32%)
American Airlines
-1.63 (-10.40%)
United Airlines
-2.75 (-7.74%)
BGC Partners
-0.835 (-25.65%)