In the early hours of the 25th, Beijing time, U.S. stocks maintained their gains Tuesday afternoon, with all three major indexes up more than 7%, and the Dow rising more than 1,800 points at one point. After the Federal Reserve announced unlimited quantitative easing yesterday, markets are still watching the anti-epidemic stimulus package that policymakers will continue to come out of. The US Congress is said to be close to reaching an agreement to bail out the epidemic. U.S. President Donald Trump says Congress must approve the stimulus plan today.
The Dow rose 1,740.42 points, or 9.36 percent, to 2,032.35, the Nasdaq rose 489.81 points, or 7.14 percent, to 7,350.48 and the Standard and Poor’s 500 index gained 186.35 points, or 8.33 percent, to 2,423.75.
Before the U.S. opened On Tuesday, stock index futures for the Standard and Poor’s 500, Nasdaq 100 and Dow Jones Industrial Average all rose sharply and met the fuse standardsetd by CME Group.
Anti-epidemic stimulus plan is expected to be approved today
Senate Minority Leader Charles Schumer, d-S.C., was quoted as saying in a conference call with Democratic leaders late Monday that Schumer and Treasury Secretary Mnuchin were close to reaching a $2 trillion stimulus package. Early Tuesday, the two sides will continue to consult on the stimulus package.
U.S. President Donald Trump also said Tuesday morning that Congress must pass the stimulus plan today.
House Speaker Nancy Pelosi later said she was optimistic that Congress would reach an economic stimulus deal in the next few hours. She said everyone agreed that stimulus legislation should be completed.
The Fed’s easing on Monday also boosted sentiment. Just hours before the U.S. Senate blocked its plan for a second bailout, the Federal Reserve launched an unprecedented unlimited easing program, announcing a series of new and wide-ranging measures to help maintain credit flows to businesses and keep financial markets running smoothly. The plan includes unprecedented measures, including the purchase of qualified corporate bonds and ETFs from companies, and the acquisition of commercial mortgage-backed bonds (MBS).
“The Fed is doing its best,” said Ben Ayers, senior economist at Nationwide. The responsibility for further support for consumers and businesses now falls primarily on fiscal policy. Early signs suggest a sudden economic pause and widespread job cuts around the world. Further action is therefore needed to mitigate the damage to the economy. “
“The unlimited and massive increase in QE sends a very clear signal that the Fed will take all necessary measures to maintain the integrity and liquidity of the US treasury market, the main asset-backed market and other core markets,” said David de Garis, head of economics at National Australia Bank.
“The U.S. market has been very dangerous since February, but there is a glimmer of hope,” said Tom Lee, an analyst at Fundstrat. “
The spread of the epidemic is grim, U.S. stocks have fallen sharply recently
The damage from the outbreak of the new coronary pneumonia virus continues. Residents around the world have been severely affected by the distance from socializing, leisure and travel spending, from small local businesses to some of the largest. These large-scale changes in social behaviour patterns are aimed at slowing the spread of the neo-coronary pneumonia virus.
There are more than 390,000 confirmed cases of new coronary pneumonia worldwide. As of 19:40 BST on March 24, there were 392,331 confirmed cases of new coronary pneumonia and a cumulative total of 17,156 deaths, according to real-time statistics released by Johns Hopkins University in the United States.
A spokesman for the World Health Organization said 85 percent of the new confirmed cases of coronary pneumonia reported in the past 24 hours had come from Europe and the United States. The spokesman also said the number of cases in the United States is growing at a very rapid rate and could be the “epicenter” of the outbreak of new coronary pneumonia.
New York has become the worst affected area in the United States. New York Governor Andrew Cuomo estimates that as many as 80 percent of the state’s 19.4 million-largest population could end up with the new coronavirus.
According to Agence France-Presse statistics, the current European region of the new coronary pneumonia confirmed cases of more than 200,000.
Jose Angel Gurria, secretary-general of the OECD, said the coronavirus pandemic had done more damage to the world economy than the global financial crisis of 2008 and the terrorist attacks of September 11, 2001.
The recent spread of the new coronary pneumonia epidemic has caused disruption to economic operations around the world and created economic uncertainty, resulting in a severe sell-off of risky assets. The Dow fell 582.05 points, or 3 percent, to its lowest level in three years on Monday. The index is likely to record its worst monthly performance since 1931. The Standard and Poor’s 500 index fell 2.9 percent to 2,237.
By Monday’s close, the Standard and Poor’s 500 index was down about 34 percent from its recent high of February 19. The Dow lost all gains since the November 2016 U.S. presidential election and fell below that level in intraday trading on Monday.
U.S. stocks fell for a second straight session during Monday’s regular session of the U.S. Senate, when the nearly $2 trillion anti-epidemic economic rescue plan suffered its second procedural vote in 24 hours, highlighting political differences between the two parties and disappointing investors who had expected the bill to be approved quickly.
“Recent market turmoil has left a scar on most financial planners,” equity strategist Sean Darby said in a note. Bear markets are brutal, and they usually portend recessions. “
Late Monday, House Speaker Nancy Pelosi unveiled a $2.5 trillion economic rescue plan to deal with the new outbreak of the virus, hoping to replace similar legislative action in the Senate.
Governments and central banks try to rescue the market are beginning to bear fruit
In the last two days, European governments have announced a number of economic stimulus plans, days of large-scale water release seems to have finally played a role.
France’s finance minister said measures to deal with the crisis could cost more than 45 billion euros and called on banks to ease mortgage lending on a case-by-case basis. The European Central Bank will enter the commercial paper market this week, possibly as soon as Wednesday, the head of france’s central bank, Jean-Claude Villerue, has also revealed.
Even Germany, which has been tightly controlling its fiscal deficit, is starting to let it go. According tomedia reports, because of the impact of the new corona virus, the German government’s debt sector has been in need of higher financing needs. As a result, the German federal government plans to issue an additional 32.5 billion euros of securities in the second quarter.
As for Italy, where the outbreak is relatively severe, market sources say the government is considering new, 18 billion euro policy measures to deal with the outbreak. In addition, Italy is understood to support the use of the European Stability Mechanism’s aid fund to provide unconditional financial support to the affected economies.
Germany, on the other hand, is ready to bail out italy in crisis. German officials are reportedly preparing to support Italy’s emergency loan from the euro zone’s bailout fund to help it weather the new crisis. Germany’s preferred option is the European Stability Mechanism to grant Italy an increased credit line with minimal restrictions.
The G20 leaders plan to hold a conference call on March 26, which will see whether further stimulus measures are introduced, Kyodo news agency reported.
IMF still expects global recession
While governments and central banks have put in place many rescue packages, the impact of the outbreak has been so great that many international organizations and investment banks expect the world to enter a recession, even if this may be temporary.
The International Monetary Fund said Monday that the new coronavirus outbreak will lead to a global recession in 2020, to a degree that may be more severe than the recession triggered by the 2008-2009 global financial crisis, but that world economic output should recover in 2021.
IMF President Georgieva welcomed the unconventional fiscal action already taken by many countries, which she said would strengthen the health-care system and protect affected businesses and workers. She also acknowledged the monetary easing measures taken by central banks, but stressed that more needed to be done, particularly fiscal stimulus measures, to stop further economic declines.
BP, Royal Dutch Shell, Total, Exxon Mobil, Chevron and other oil stocks rose.
Bank stocks such as Credit Suisse, Deutsche Bank, UBS, JPMorgan Chase, Barclays, Goldman Sachs, Wells Fargo and Morgan Stanley rose.
Gold stocks strengthened.
Boeing soared. Trump says he needs help with Boeing’s response to the outbreak. At a White House news conference on Monday, Mr. Trump said Boeing would need the government’s “help” because of the impact of the new corona virus crisis on tourism.
Tesla shares rose. The company applied for a patent for fleet data to train self-driving neural networks.
Budweiser Abed in declines in its previous earnings guidance, predicting a decline of about 10 percent in first-quarter EBITDA.
Alibaba’s share price climbed. Japan’s SoftBank Group plans to sell about $14bn worth of Alibaba shares as part of a plan announced yesterday to raise Y4,500bn ($41bn) in assets, according to people familiar with the matter. SoftBank could sell a stake in Ali for between $12billion and $15 billion, the source said.
In European markets on Tuesday, Europe’s pan-European index closed up 7.48 per cent, Britain’s FTSE 100 closed up 7.5 per cent, Germany’s DAX closed 10.1 per cent higher, France’s CAC closed up 7.6 per cent and Spain’s IBEX closed 7.7 per cent higher.
The dollar index fell sharply. The price of crude oil futures rose sharply. Gold futures soared. The yield on the 10-year Treasury note rose 3.8 basis points to 0.805 percent.