Shares fell in Hong Kong and Japan, while U.S. and European futures reversed early losses to trade higher. Stocks in China and South Korea saw modest gains with volumes in Asia remaining well below average. Earlier, the S&P 500 closed lower as earnings reports showed the virus is taking its toll. Goldman Sachs Group Inc.’s investment portfolio took a hit, while Bank of America Corp. and Citigroup Inc. followed rivals in setting aside billions for loan losses. Treasuries held overnight gains and oil steadied near its lowest in two decades.
Both corporate results and economic data are highlighting the severe hit resulting from the economic shutdown designed to combat the spread of the coronavirus. U.S. retail sales and factory output posted historic declines in March, and surveys in April looked even worse. Manufacturing in New York state and sentiment among American home builders plunged.
“The economic reality and corporate earnings reality, at some stage, needs to reconcile with the markets,” Tai Hui, Asia-Pacific chief market strategist at JPMorgan Asset Management, said in a phone interview. “The market hasn’t fully factored in the uncertainties or potential risks in terms of earnings downgrades.”
Meanwhile, President Donald Trump said data suggest the U.S. has “passed the peak” on new cases and added he will announce on Thursday guidelines to relax stay-at-home rules. That comes as Covid-19 has now infected 2 million people globally, with fatalities around the world topping 134,000.
“We don’t know what the economy is going to look like over the next year — there is a lot of uncertainty with the virus,” Mark Kiesel, global credit chief investment officer at Pacific Investment Management Co., said on Bloomberg TV. “We are not through the woods yet — there could be a second wave.”
Elsewhere, oil fluctuated after tumbling Wednesday amid a record collapse in fuel demand and the biggest ever weekly increase in domestic crude supplies. Mexico’s peso retreated after Fitch downgraded the country’s debt rating, while the Philippines cut rates in an unscheduled move.