Stocks climb as virus numbers comfort markets
NEW YORK, USA – Global stock markets rose on Thursday, April 9, as investors welcomed data suggesting the coronavirus outbreak may be close to reaching its peak.
Heartened by yet another massive intervention by the Federal Reserve, Wall Street shrugged off a devastating jobs report showing weekly United States unemployment filings hit 6.6 million, with the Dow closing up 1.2%.
Fed Chair Jerome Powell on Thursday predicted the US would see a "robust" recovery once the coronavirus is contained, and announced $2.3 trillion in new lending programs to support the world's largest economy.
A warning of the worst crisis since the Great Depression from International Monetary Fund chief Kristalina Georgieva who said "global growth will turn sharply negative in 2020" also did not stop investors.
Though expected more volatility in the days ahead, JJ Kinahan, chief market strategist at TD Ameritrade, was upbeat: "We're going to get through this and when we do, people will get back to work pretty quickly."
Europe's equity markets were solidly higher at the close, although off the day's best levels, and Wall Street's finish was its second consecutive day of gains. Most Asian stock markets had closed solidly higher, except Tokyo.
"Despite some pretty awful coronavirus statistics, traders are optimistic that the outbreak is nearing its peak and that governments would roll out more stimulus," said City Index analyst Fiona Cincotta.
However, oil sank as talks between top crude producing nations to support oil prices produced no deal.
The countries were holding a crucial teleconference to address the collapse in oil demand caused by the coronavirus and a damaging Saudi-Russia price war, which was seen as the best chance to bolster crude prices.
As they got underway, oil prices surged to post gains of more than 10%, but then settled down, with prices dipping in New York trading.
Meanwhile, the dollar weakened at the prospect of ever more cash sloshing around the economy.
While the Vix "fear index" has halved from its levels seen in mid-March, there was still caution among observers, with health experts stressing that any premature loosening of restrictions could accelerate the spread of the virus.
The economic toll from the crisis is becoming glaringly apparent, with France now in recession after suffering its worst contraction since 1945 and European powerhouse Germany expected to shrink by a tenth in the 2nd quarter of the year. (READ: France, Germany face historic economic declines)
Despite this, European Union leaders are struggling to agree on a bailout plan to support the region, with a major sticking point being so-called coronabonds that would pool debt among nations. – Rappler.com