The S&P 500 and other major averages are bouncing back strongly from yesterday's decline as House Speaker Nancy Pelosi said during an interview on CNBC that she has "real optimism" that a stimulus bill will get done in the next few hours after a compromise that will see the inspector general oversee the $500B company fund that will likely be included in the legislation. The CARES Act has grown to an unprecedented $2T relief package from $1.3T last Thursday and other lawmakers are also expressing their view that Republicans and Democrats are getting close to passing the bill for sign off by the President. Meanwhile, President Trump tweeted earlier that "our people want to return to work," adding that "THE CURE CANNOT BE WORSE (by far) THAN THE PROBLEM! Congress MUST ACT NOW."
ECONOMIC EVENTS: The U.S. Treasury Department issued a statement that G7 Leaders "are taking action and enhancing coordination on our dynamic domestic and international policy efforts to respond to the global health, economic, and financial impacts associated with the spread of the coronavirus disease 2019 - COVID-19." Collectively, G7 nations "will do whatever is necessary to restore confidence and economic growth and to protect jobs, businesses, and the resilience of the financial system," the joint statement asserted.
In U.S. data, Markit's flash manufacturing index for March fell 1.5 points to 49.2. The Richmond Fed index defied the coronavirus with a surprising 4 point March rise to a reading of 2. New home sales also soared past estimates with a restrained 4.4% February pullback to a robust 765,000 home pace.
The latest data from the Johns Hopkins Whiting School of Engineering shows there are now 396,249 cases of COVID-19 and 17,252 deaths.
TOP NEWS: Chevron (CVX) announced several steps it is taking in response to market conditions, most notably reducing its guidance for 2020 organic capital and exploratory spending by 20% to $16B with reductions expected to occur across the portfolio. Excluding 2020 asset sales and price related contractual effects, the company expects 2020 production to be roughly flat relative to 2019. In addition to reducing capital expenditures, the company is taking other actions, such as suspending its $5B annual share repurchase program after repurchasing $1.75B of shares during the first quarter. "Chevron's financial priorities remain unchanged," said Chevron CFO Pierre Breber. "Our focus is on protecting the dividend, prioritizing capital that drives long-term value, and supporting the balance sheet."
Ford (F) announced that its team members are working with 3M (MMM) to increase the manufacturing capacity of their powered air-purifying respirator, or PAPR, designs and working jointly to develop a new design leveraging parts from both companies to meet the surge demand for first responders and health care workers. In addition, Ford and GE Healthcare (GE) said they are working together to expand production of a simplified version of GE Healthcare's existing ventilator design to support patients with respiratory failure or difficulty breathing caused by COVID-19. At the same time, Ford said it is not planning to restart its plants in the U.S., Canada and Mexico on Monday, March 30 as originally hoped.
Automaking peer General Motors (GM) announced that it intends to drawdown approximately $16B from its revolving credit facilities as a "proactive measure to increase GM's cash position and preserve financial flexibility in light of current uncertainty in global markets resulting from the COVID-19 pandemic." GM is also suspending its 2020 guidance due to uncertainty around the business impact of the COVID-19 pandemic.
Shares of Comcast (CMCSA) are in the spotlight after the company announced that the ongoing COVID-19 pandemic could have a "material adverse impact" on results over the near- to medium-term. Meanwhile, the President of the International Olympic Committee and Japan's Prime Minister Shinzo Abe announced that the Olympic games will be rescheduled to no later than summer 2021.
Nike (NKE), which has a global view of both Asia in recovery and the Western world in the grips of the coronavirus crisis, is scheduled to report results of its third fiscal quarter after the market close tonigh, with a conference call scheduled for 5:00 pm ET.
MAJOR MOVERS: Among the noteworthy gainers was Genworth (GNW), which surged 26% after announcing that the New York State Department of Financial Services has reapproved the proposed acquisition of control by Oceanwide of Genworth's New York-domiciled insurance company, Genworth Life Insurance Company of New York. Also higher was Virgin Galactic (SPCE), which gained 31% after Morgan Stanley analyst Adam Jonas upgraded shares to Overweight from Equal Weight following the greater than 70% pullback in the the stock over the past month.
Among the noteworthy losers was Milestone Pharmaceuticals (MIST), which plunged 83% after the company's Phase 3 trial of etripamil failed to meet the primary endpoint relative to placebo. Also lower was Cheetah Mobile (CMCM), which slipped 5% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 1,632.08, or 8.78%, to 20,224.01, the Nasdaq was up 461.33, or 6.72%, to 7,322.00, and the S&P 500 was up 173.52, or 7.76%, to 2,410.92.
