Top 5 Things to Know in the Market on Monday, April 13th

By Noreen Burke

Investing.com - Oil prices are mixed after major producers finally agreed to historic output cuts, but fears of an oversupply weighed with the coronavirus pandemic continuing to hammer the demand outlook. U.S. futures are lower as traders brace for the start of earnings season. Minneapolis Federal Reserve President Neel Kashkari warned that the U.S. economic recovery will be a "long, hard road". The G20 countries are reported to be nearing a debt deal for poorer nations to help them through the crisis. Meanwhile, financial markets in Europe are closed for the Easter holiday. Here’s what you need to know to start your day.

1. Oil prices shrug off record output cut

Oil prices were mixed in a volatile session following a landmark deal by the Organization of the Petroleum Exporting Countries and allies led by Russia to cut output by 9.7 million barrels per day (bpd) in May and June - equal to nearly 10% of global supply, after four days of marathon talks.

U.S. WTI crude futures were up 1.1% at $23.03 per barrel by 06:11 AM ET (10:11GMT), having fallen as low as $22.05 earlier in the day, while Brent futures were down 0.7% to $31.25 per barrel.

The cut may be more than four times deeper than the previous record set in 2008 but is still dwarfed by the near 30 million bpd drop in demand in April already anticipated by forecasters like Goldman Sachs.

Oil prices have collapsed as the coronavirus epidemic locked down economies around the world, decimating fuel demand and Saudi Arabia and Russia flooded the market in a price war.

2. U.S. futures point to lower open

U.S. stocks are set to open lower as traders braced for the start of an earnings season marked by unprecedented uncertainty over how severe the hit to corporate profits will be amid widespread measures aimed at containing the spread of the coronavirus pandemic.

By 06:11 AM ET (10:11GMT), the Dow Jones 30 futures contract was down 338 points, or 1.4% at 23,283 points. The S&P 500 futures contract was down 1.3% and the Nasdaq 100 futures contract was down 1.2%.

The six largest banks in the U.S., including JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC) and Goldman Sachs (NYSE:GS) set to report this week. They tend to be viewed as bellwethers for the wider economy because of their central position in the financial system. 

3. G20 reportedly nearing debt deal for poorer countries

The G20 group is planning to offer the world’s poorest, indebted nations a freeze on sovereign debt repayments as part of plan to stave off a debt crisis in emerging markets, the Financial Times reported Monday.

The plan, which is due to be finalized at a meeting later this week, would see a freeze on sovereign debt repayments for six or nine months, or possibly through to 2021, the FT reported.

It comes after the International Monetary Fund and the World Bank appealed last month for urgent debt assistance for poorer nations, to avoid a cascade of debt defaults in emerging economies, some of whom have also been hit hard by a plunge in oil prices.

4. U.S. economic recovery will be a "long, hard road”

The U.S. economic recovery will likely be a "long, hard road" in which some parts of the economy will periodically shut down and restart, Minneapolis Fed President Neel Kashkari has warned.

"We could have these waves of flare-ups, controls, flare-ups and controls until we actually get a therapy or a vaccine," Kashkari said Sunday.

Kashkari's comments came amid signals from President Donald Trump that he wants to re-open the economy as soon as possible.

But public health experts have warned that the U.S. death toll could surge to 200,000 over the summer, from 21,300 on Sunday, if stay-at-home orders are lifted when they expire at the end of the month.

5. Coronavirus update

The U.S. Italy and France have all seen a drop in Covid-19 deaths in the past 24 hours, with Italy – the most badly hit country in Europe - reporting its lowest toll in more than three weeks.

The number of deaths in hospitals across the U.K. has passed 10,000 and a senior scientific adviser to the government has said the country risked becoming the worst-hit in Europe.

Confirmed cases in the U.S. have risen above 555,000 as of Monday, more than any other country in the world. The U.S. has also recorded more fatalities than any other country, at least 22,064 as of Monday, with the largest numbers so far in New York state.

South Korea plans to send kits designed to run up to 600,000 coronavirus tests to the U.S. on Tuesday after an appeal from President Trump.

--Reuters contributed to this report