US stocks rise on optimism about reopening the economy: May 5, 2020

Demand for gasoline is recovering from a historic collapse. And that’s lifting oil prices sharply higher. 

US crude spiked another 20% to $24 a barrel on Tuesday morning. Oil hit an intraday high of $24.48 a barrel, the highest level since April 13.  

Although oil prices remain at depressed levels, they’ve raced back to life since late April on hopes that the worst of the unprecedented decline in demand could be over as some US states begin to reopen. 

Gasoline demand in the United States climbed on Monday to the highest level since March 16, according to GasBuddy. Demand is now up 19% from April 6, the lowest Monday for gasoline demand.  

The sharp rebound in oil prices is boosting oil stocks, which have been crushed this year by the crash.

All 27 members of the S&P 500 energy sector (XLE) traded higher Tuesday morning, led by 6% spikes by Occidental Petroleum (OXY), Concho Resources (CXO) and Apache (APA). ExxonMobil (XOM) and Chevron (CVX), the largest US oil companies, rallied 3% apiece.  

Even President Donald Trump, who normally roots for cheap oil, cheered the recovery in the energy market. 

“Oil prices moving up nicely as demand begins again!” Trump tweeted Tuesday morning.  

 Slack CEO Stewart Butterfield is in no rush to bring his employees back to the office. 

In an interview with CNN’s Julia Chatterley, Butterfield said he’s told employees the earliest possible return to the office is for the company is September 1.

He said the announcement got a mixed response from his workforce, some of whom appreciate the time and safety precautions, while others crave a return to normalcy.  

Slack has more than 2,000 employees in 16 offices around the world, from San Francisco to Sydney, Australia.

America's services sector is unsurprisingly struggling during the coronavirus lockdown.

The non-manufacturing purchasing managers' index for April dropped to 41.8 points from 52.5 points in March, according to the Institute for Supply Management. That's the worst reading since March 2009, but it's actually slightly better than economists had feared.

Still, any reading below 50 signals economic contraction.

The ISM index is based on a nationwide survey of executives in non-manufacturing industries. The only two of these industries that reported growth in April were public administration, and finance and insurance.

Meanwhile a different services PMI survey, from IHS Markit, showed the sharpest index decline since reporting began in 2009.

The outlook for business activity in the services sector over the coming 12 months also fell, on worries about when the lockdown will end and fears about how long a recovery will take. That's the first recorded instance of pessimism for the outlook in the history of the report.

Markit's composite PMI, which accounts for both the services and manufacturing sectors, also recorded its sharpest decline on record.

Americans stuck at home during the coronavirus pandemic are shopping online for home goods, and that's a boon for Wayfair.

Wayfair (W) announced Tuesday that sales for its most recent quarter increased 20% compared with the same period last year.

Despite the sales gains, however, Wayfair lost $285 million during the quarter.

Still, Wayfair's stock surged 25% in early trading.

US stocks opened higher on Tuesday, adding onto Monday’s gains, as optimism about the reopening of the economy boosted the market.

Norwegian Cruise Line Holdings (NCLH) warned investors that it might be forced to go out of business.

In a new filing with the Securities and Exchange Commission, the company said its accounting firm has "substantial doubt" about Norwegian's ability to continue as a going concern because of the Covid-19 pandemic.

Companies with this kind of dire outlook are sometimes able to turn things around and survive, although it often takes a trip through bankruptcy to shed debt and other liabilities in order to do so.

Shares fell 11% in premarket trading.

Read more here.

The coronavirus pandemic has whacked global trade, and its aftershocks are expected to become more visible in the coming months.

In March, the US trade deficit amounted to $44.4 billion, according to the Census Bureau. That's up $4.6 billion from February and is in line with expectations.

Exports dropped 9.6% and imports fell 6.2%. US exports of cars, parts and engines dropped to a level not seen since November 2011.

The deficit could drop toward the $25.4 billion low it hit during the great financial crisis in May 2009, they added. The US petroleum surplus hit $2.1 billion, the highest level since the Census began tracking it in 1978.

And America's trade deficit with China fell to $11.8 billion, the lowest level since March 2004.

Fiat Chrysler reported sharply lower sales and a 471 million euro ($510 million) loss. But it said it plans to move ahead with its merger of PSA Group, the European automaker that makes Peugeot cars.

Production at its auto plants in Italy and China were down for much of the first quarter, and for the last part of March at its North American plants. But production has restarted in China and at one of its Italian plants, and it said it is "fully prepared to restart production as conditions allow."

It did not give any guidance on second quarter results or even where sales stood in April in its earnings statement. In the first quarter revenue fell 3.9 billion euros, or $4.2 billion, a drop of 16%. Shipments to dealers worldwide declined by 21%.

Shares of Fiat Chrysler were narrowly higher in European trading on the report.

Pfizer (PFE) and BioNTech SE (BNTX) shares rallied in premarket trading after announcing a significant step in trials for a Covid-19 vaccine.

The companies said Tuesday "first participants have been dosed" in the United States following a trial in Germany last week.

Roughly 360 healthy people in two age groups (18-55 and 65-85 years old) will be given the potential vaccine in the clinical trial.

Pfizer CEO said the shortened timeframe for moving from "pre-clinical studies to human testing is extraordinary." If successful, the vaccine could be distributed in the US by the end of the year.