Global Stocks Rise As Countries Begin To Reopen Economies

Global stocks rose Monday, with investors anticipating that stimulus measures and the easing of coronavirus-lockdown measures in the U.S. and Europe may help kick-start economic activity.

Futures tied to the Dow Jones Industrial Average advanced 0.9%. Last week, the benchmark for U.S. blue-chip stocks posted modest losses, dropping 1.9% after a massive rally from late March to mid-April.

Japan’s Nikkei 225 stock index ended the day up 2.7%. The Bank of Japan scrapped its target for government-bond purchases and said it would nearly triple its holdings of corporate debt to aid fundraising by companies affected by the coronavirus pandemic.

European markets climbed as countries including Italy and Spain signaled that they may loosen restrictions in the coming weeks. The pan-continental Stoxx Europe 600 gauge rose 1.7%.

Italy announced a timetable for reopening its economy and restoring daily life beginning on May 4, but warned that a resurgence in cases could lead to a return of restrictions. Spain allowed children to leave their homes after six weeks under one of the strictest lockdowns in the world.

In the U.S., some states allowed retailers, salons and other businesses to reopen over the weekend as new infections appeared to slow.

“We don’t yet know the full scale and the pace of lockdowns being eased, but it’s important for confidence,” said Edward Park, deputy chief investment officer at Brooks Macdonald. “Suggestions that factories will restart sooner rather than later suggests that the pressure on economic output in the data we’ve seen will be a shorter-lived phenomenon.”

Concerns about sovereign debt from Europe’s most debt-laden countries also showed signs of easing. Italian, Spanish and Greek bonds rallied after S&P Global Ratings on Friday held off on downgrading Italy’s credit rating. The yield on Italy’s 10-year bond fell to 1.754% Monday, from 1.903% Friday.

Markets at the tail end of last week were fixated on European political risk, and a run on debt markets triggered by a downgrade for Italy,” said Mr. Park. “The lack of a downgrade offers some breathing space.”

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Oil prices dropped sharply as energy markets remain volatile at the start of a week that will test the world’s ability to house a glut of crude. West Texas Intermediate futures, considered the benchmark for U.S. crude prices, fell over 24% to $12.59 a barrel. Brent crude, the global benchmark, fell 5.3%.

The yield on the benchmark 10-year U.S. Treasury rose to 0.630%, from 0.594% Friday.

Investors will also be closely focused on the outcome from the U.S. Federal Reserve and the European Central Bank’s meetings this week. Recent economic data and forecasts from many countries have been weak, prompting policy makers to take unprecedented steps and allocate huge sums to support businesses and individuals whose finances have taken a hit.

“Normally when you have a recession, there are a number of factors that are reining in credit and stimulus and that’s not the case here,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Later in the week, a flood of U.S. companies—including, Apple and Facebook— are scheduled to report first quarter earnings. They are likely to provide insights on how leaders of the biggest American businesses view prospects for the rest of the year. But the pandemic has made earnings forecasts even less reliable than normal, analysts and investors said.

“Most investors are looking through the earnings reports as somewhat meaningless because we’ve never had this mix of fall-off in demand and central bank, government stimulus support before,” Mr. Haefele said.

Among major European equities, Deutsche Bank AG was the best performer. The stock rose over 10% after the German bank said late Sunday that it will beat analyst expectations and report a first-quarter profit. Higher revenue and lower expenses have helped it offset provisions for credit losses triggered by the coronavirus outbreak.
Across Asia, South Korea’s Kospi Composite advanced 1.8% while Hong Kong’s Hang Seng Index gained 1.9%. The stocks benchmark in Australia climbed around 1.5%.

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China’s statistics bureau Monday released data showing that industrial companies’ profits in March were down 34.9% from a year earlier, a slight improvement from the 38.3% pace of decline in January-February. The country last month began reopening some industrial hubs after closing most factories and companies to curb the coronavirus’s spread. The Shanghai Composite Index closed 0.3% higher.

Central banks’ stimulus policies and other government measures to subsidize wages are all helping to buoy markets and asset prices, said Iris Pang, chief economist for Greater China at ING Bank NV in Hong Kong. “They will take a while to reach the real economy,” she said, adding that the path to increasing consumption is unlikely to be smooth.





Global Stocks And U.S. Futures Gain Despite China GDP Plunge

Stock benchmarks in the Asia-Pacific region rose, while S&P 500 stock futures traded higher, pointing to a strong session for U.S. shares on Friday.




Market watchers said a range of factors helped power the rally, including the prospect of the U.S. gradually getting back to work and some encouraging news on potential treatments for the new coronavirus. Investors were able to look past data showing an unprecedented—but widely expected —plunge in Chinese economic activity.

In early-afternoon trading in Hong Kong, E-mini S&P 500 futures gained more than 3%. Australia’s S&P/ASX 200, Japan’s Nikkei 225 and South Korea’s Kospi rose by about 2% to 3% each, and the Shanghai Composite Index added 0.9%, while Hong Kong’s Hang Seng Index advanced 2.3%.

Andy Maynard, managing director of equities sales and trading at China Renaissance Securities, said news about possible coronavirus treatments had buoyed markets. He said that while effective drugs might take years to develop, the developments were catalysts to say the situation isn’t as bad as feared and that markets would recover.

Shares of Gilead Sciences rose 15.1% in late U.S. trading after a report that one of its experimental drugs might be performing well in clinical trials of patients with Covid-19, the respiratory disease caused by the new coronavirus.

Ben Luk, senior multiasset strategist at State Street Global Markets, said other factors were also boosting sentiment in regional markets. Those included the prospect of the U.S. gradually reopening its economy and better-than-expected export figures from Singapore.

Singapore said Friday that exports, excluding oil, rose 17.6% in March from a year earlier, far better than the median 7.9% contraction forecast in a Wall Street Journal poll of 11 economists. “There’s more comfort that China continues to recover based on those export numbers,” Mr. Luk said.

Markets remained strong even as official statistics showed China’s economy shrunk 6.8% from a year earlier in the first quarter. That was the first year-over-year contraction since Beijing began reporting the quarterly figure in 1992, but it was less sharp than the 8.3% median forecast of economists polled by The Wall Street Journal.

“Everybody was expecting a very bad first quarter,” said Chi Lo, senior economist for Greater China at BNP Paribas Asset Management. Mr. Lo said the Chinese government’s goal of doubling the economy in size from 2010 to 2020, in real terms, or after adjusting for inflation, is now out of reach.

He added that the speed with which China’s economy returned to full strength would depend partly on how badly the pandemic hit overseas demand for its goods and services.

In the U.S., President Trump released new federal guidelines on reopening the economy that would leave decision-making largely up to governors. Mr. Trump said: “We must have a working economy, and we want to get it back very, very quickly.”

The Dow Jones Industrial Average and the S&P 500 on Thursday posted modest gains even after data showed another sharp rise in Americans seeking jobless benefits, and slumping construction of new homes.

Globally, confirmed cases of the new coronavirus reached nearly 2.2 million, with the U.S. accounting for nearly one-third of the cases, according to data from Johns Hopkins University. The number of deaths world-wide has topped 143,000.





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Global Stocks Rise… All Eyes on the Fed

{ Global Stocks – Stock Market News } …  • European, Asian stocks up • U.S. Treasury yields rise… Global stocks climbed at the end of a week dominated by central-bank policy, with a closely watched speech expected from Federal Reserve Chairman Jerome Powell later in the day.

The Stoxx Europe 600 opened 0.5% higher after a broadly positive session in Asia, with the U.K.’s FTSE 100 and the German DAX both up 0.6%.

Markets will be watching for clarity from Mr. Powell and other central-bank leaders at the Jackson Hole symposium on the likelihood of further interest-rate cuts and action to lift a stagnant global economy. He is set to speak Friday at 10 a.m. ET. Bank of England Gov. Mark Carney speaks later in the day.


Analysts said the Fed chairman will have to show he is willing to take strong action to support the economy. Dallas Fed President Robert Kaplan said Thursday at the gathering of central bankers that he was open to cutting rates in September. The Fed’s July rate move lowered its benchmark rate to a range between 2% and 2.25%.

Friday’s rises in stocks came a day after a series of weak manufacturing data around the world had raised concerns about a possible recession, weighing on U.S. indexes.

Gains in Europe were led by technology firms, with the sector up 1.1%. Danish IT company SimCorp ’s shares climbed 6.3% after it raised its revenue guidance.

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Toronto-based Entertainment One’s shares jumped 29% after U.S. toy maker Hasbro said it would buy it for $4 billion.

The yield on 10-year Treasurys rose to 1.636% on Friday, from 1.613% on Thursday. Bond yields and prices move in opposite directions. In currencies, the pound fell 0.3% against the U.S. dollar to $1.2215. Sterling also fell against the euro by 0.2%.

The Dollar Index, which measures the currency against a basket of its peers, ticked up 0.1%. In commodities, global benchmark Brent crude gained 0.1% to $60.16 a barrel. Gold dropped 0.2%.





Global Stocks Stay On Track For Weekly Rise

Stocks edged higher Friday and were on course to close out a week of gains despite a backdrop of mixed economic data from major global economies. U.S. futures put the S&P 500 and Dow Jones Industrial Average on course for 0.4% gains at the open, with the Nasdaq-100 set to climb 0.5%. The S&P was set to close out the week 2.5% higher, extending its 2019 gains to 12.5%, despite snapping a three-day streak of gains Thursday.

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Shares in Boeing were down 0.1% in premarket trading after it said Thursday it would pause deliveries of its 737 MAX jetliner. A U.S. Air Force official also raised concerns about one of the company’s biggest military-plane programs. Shares in the aircraft manufacturer have already plunged 15% this month, with investors spooked by two fatal 737 MAX crashes within five months.

Facebook shares were set to open 1.6% lower after two executives announced their departure from the company. Apple was set to advance 0.7%, extending Thursday’s gains that came after a Morgan Stanley analysts made an optimistic call on the stock.

Investors were continuing to monitor any remarks out of Washington and Beijing on trade negotiations, after President Trump’s comments that it may be several weeks before officials have a clearer picture of whether a trade agreement can be reached with China, as well as U.S. industrial production data due out later in the day.

With fourth-quarter earnings releases having slowed to a trickle, investors have refocused on mounting concerns around the health of global economic growth.

This week has seen a batch of mixed global data, with eurozone inflation data released Friday matching market expectations, coming after weaker-than-forecast U.S. inflation numbers Thursday. Similarly, Chinese credit and monetary supply figures undershot forecasts, while the country’s home price index growth fell to a 10-month low Friday.

Economic anxieties have tempered stock market gains fueled by increasingly cautious central banks, better-than-expected earnings and progress in trade talks between Washington and Beijing.

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The mixed fortunes of major economies have left some investors uncertain of the way forward for equities in the coming months. In a new Wall Street Journal survey, economists sharply lowered their forecasts for growth in the first quarter of 2019.

“You look at the U.S. numbers coming out and you see consumers are out continuing to spend money and keep the economy going,” said JJ Kinahan, chief market strategist at TD Ameritrade. However, Europe and Asia present a gloomier picture, Mr. Kinahan said, “and when you have one important area of the world in slowdown mode, and add in Asia, it’s hard to get your arms around how well or poorly growth is doing. “

Still, with gloomier growth indicators having prompted a wave of dovish rhetoric from central banks and stimulus measures from the Chinese government, there are signs that the softness may be stabilizing.

This week’s data out of Europe “wasn’t as bad as markets expected and we are seeing a turn in some of the hard data out of China,” said Thushka Maharaj, global multiasset strategist at J.P. Morgan Asset Management.

China’s fiscal policy, he said, “has at least been supportive, so now we need to see how quickly that translates into data flow and whether it’s likely we’ll see that soon or whether we’ll have to wait until the second half of the year.” The Stoxx Europe 600 was up 0.3% in late morning trading, with autos stocks up 1.1%, driving gains as BMW shares picked up by the same amount after the German car maker posted earnings.

The British pound climbed 0.3% against the U.S. dollar, on course to close out the week 2% higher. The U.K.’s parliament has voted both to rule out leaving the European Union without a withdrawal deal and in favor of an extension to the current Brexit deadline of March 29.

With a no-deal Brexit remaining the current legal default, politicians were no closer to reaching a common position on what Prime Minister Theresa May ought to do with an extension period, should the EU grant one. The U.K.’s FTSE 100 was up 0.5%.

That followed upbeat trading in Asia, where Japan’s Nikkei 225 index climbed 0.8%, after the Bank of Japan surprised few investors by leaving interest rates unchanged while also maintaining purchases of Japanese government bonds. The yield on 10-year Japanese government bonds had last risen to -0.039% from -0.042% late Thursday.

China-exposed stocks also advanced, with Hong Kong’s Hang Seng benchmark up 0.6% after Chinese Premier Li Keqiang said in a speech that China’s government will consider cutting interest rates and banks’ reserve requirement ratio to counter new downward pressure on the economy.

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