Stock markets rise on easing lockdowns, China exports

NEW YORK, USA – Stock markets rose on Thursday, May 7, as investors looked beyond grim economic news to focus on easing coronavirus lockdown measures, with surprisingly strong Chinese export data adding to the positive vibe.

Major Wall Street indices gained around 1% or more, a rise comparable to the advances seen at the closing bell across Europe.

China’s exports saw a surprise 3.5% rise in April, according to official figures on Thursday.

“Market participants are hoping to see a similar bounce in data for other major economies once lockdown measures are eased,” said Fawad Razaqzada at ThinkMarkets.

He cautioned, however, that the economic damage from the virus could already be too deep to allow for a quick rebound.

Nevertheless, the overall mood was upbeat, particularly in Europe, where several countries are beginning to relax confinement measures.

‘Optimism’

“Continued optimism about the easing of lockdowns has boosted European stock markets,” said CMC Markets analyst David Madden.

“A number of countries have taken steps to reopen sections of their economies and there is speculation the UK could be loosening restrictions in the next few days.”

But a slew of monumentally bad data has highlighted the struggle governments face in reigniting economies, with hundreds of millions of people left jobless and countless companies going under or on the brink of insolvency.

Germany and France reported slumps in industrial production and Britain said its total economic output would plummet by 14% this year.

The United Kingdom forecast came a day after the European Union warned of a 7.7% eurozone contraction in 2020.

In the US meanwhile, new claims for unemployment benefits declined slightly last week, but were still a staggering 3.2 million. That took the count in the wake of coronavirus shutdowns to 33.5 million.

The data came ahead of the potentially historic April jobs report on Friday, May 8, which will provide the most comprehensive accounting thus far of the devastation in the labor market following the shutdowns.

“Yet markets fail to respond,” said Joshua Mahony, senior market analyst at IG.

Instead the “dour data” were “swatted away” by investors who preferred to focus on hope for an economic rebound, he said.

A positive catalyst on Thursday was an announcement from biotech company Moderna that it received clearance from the US Food and Drug Administration for a phase-two study of a vaccine for the novel coronavirus.

Shares of Moderna jumped 8.7% following the statement. – Rappler.com