On the evening of the 7th, Beijing time, U.S. stocks opened sharply higher on Tuesday, continuing yesterday’s upward trend. U.S. stocks rebounded sharply yesterday, with the S.P. 500 closing at its highest level since March 13. The spread of the global epidemic is likely to be an early sign of stabilisation, giving market sentiment. The market continues to pay attention to the anti-epidemic fiscal measures introduced by various countries.
The Dow rose 849.24 points, or 3.74 percent, to 2,3529.23, the Nasdaq gained 214.88 points, or 2.72 percent, to 8,128.12 and the Standard and Poor’s 500 index gained 82.75 points, or 3.11 percent, to 2,746.43.
Analysis suggests that market sentiment is too optimistic The stock index may retest its lows
U.S. stocks closed sharply higher on Monday, with all three major indexes up more than 7 percent, and the Dow closing up more than 1,600 points, its third-biggest gain on record. U.S. stocks surged yesterday as investors believed the spread of the U.S. and global coronavirus outbreaks may have shown early signs of leveling off.
Analysis points out that as the outbreak in Europe and the United States shows signs of slowing down, coupled with government stimulus measures and central bank-infused liquidity is also beginning to play a role, the market continues to rebound, aggressive buying is returning.
But Matt Maley, chief market strategist at Miller Tabak, said in the report: “We continue to believe that before the bear market is over, it is highly likely that the major indexes will retest the March lows and continue to fall.” “
U.S. stocks are still in a bear market, with the Standard and Poor’s 500 index down about 21.5 percent from its all-time high. Many on Wall Street believe that the current stock market value does not fully reflect a potential corporate profit collapse, as the outbreak of the coronavirus has effectively halted the global economy.
“Investors selectively emphasize positive stakes, as they did when the stock market was at a bear market, as they have always been,” Ed Yardeni, president and chief investment strategist at Yardeni Research, said in a note to clients. In our view, we are in the midst of a huge rebalancing from bonds to equities. “
“The fall in US stocks into a bear market may reflect expectations of a US recession in the second and third quarters,” he said. But stock market pricing has yet to reflect the likelihood that the recession will last at least until 2021 or beyond. Instead, the market’s recent actions suggest that investors are betting that the U.S. economy will start in the fourth quarter and continue until 2021. “
In a new report, Peter Oppenheimer, an analyst at Goldman Sachs, predicts that it will take us about four years to bring earnings back to the levels they were at the start of the year.
He outlined Goldman’s earnings per share forecast for SXXP for 2020-2022, which suggests a catastrophic plunge this year, with profits almost half wiped out, but then rebounding by another 50 per cent in 2021 and another 11 per cent in 2022.
Early signs of global outbreak or stabilization
New York, the state with the highest number of infections in the United States, reported Friday that there were 599 deaths from coronary pneumonia that day, roughly the same as sunday. The total number of cases in the state rose to more than 130,000 from more than 122,000 on Sunday.
Hospitals are still under pressure to overcrowd patients in New York and other coronavirus hotspots in the United States, and virus testing materials and medical equipment, including ventilators, remain scarce.
U.S. President Donald Trump said at a news conference Monday that “the light at the end of the tunnel” is currently being tested on 10 different experimental drugs. Trump responded to comments by WORLD Health Organization officials, saying research into vaccines and treatments is “accelerating at an alarming rate.”
Italy, another major affected by the global coronavirus outbreak, reported on Monday that new cases of the virus were on the rise, but a drop in new confirmed cases suggested that the outbreak may have eased. Italy reported 636 deaths from coronary pneumonia on Monday, compared with 525 on Sunday. Monday’s new confirmed number was 3,599, the fewest since March 17.
South Korea reported 47 new cases of coronavirus infection on Tuesday, the same number as Monday, the second day in a row that it was below 50 and the fewest single-day increase since late February.
Japan, hard hit by the coronavirus outbreak, declared a state of emergency on Tuesday and approved a nearly $1 trillion stimulus package to help contain the outbreak and reduce its damage.
Economists predict the outbreak will have far-reaching effects on the economy
In other countries, as the coronavirus outbreak began to subside, many countries began to plan to withdraw and phase out social distance measures. Germany has reportedly drawn up an action plan to allow businesses and schools to reopen, with some restrictions. Austria is preparing to re-open economic activity early next week, Reuters reported.
Despite early signs of optimism about the timetable for the outbreak, market analysts and economists agree that the impact of the coronavirus pandemic should be prepared, as it will have far-reaching consequences for corporate profitability and overall economic activity this year.
In a report published Monday afternoon, economists at Capital Economics, led by Paul Ashworth, said they expected an “unprecedented” 40 per cent drop in the us’s second-quarter gross domestic product figures, while the unemployment rate would soar to 12.5 per cent within a few months.
“Even if the US economy recovers well in the second half of the year, we still expect GDP to fall by 5.0 per cent for the full year, but rebound by 6.5 per cent by 2021,” they said. “
Similarly, Jamie Dimon, JPMorgan’s chief executive, said in his annual letter to shareholders on Monday that he expected the coronavirus outbreak to “cause at least a severe recession and bring global financial pressures similar to the 2008 financial crisis.” “
U.S., Japan, Europe continue huge stimulus package
There is run-off for central banks around the world to continue to make room for easing, and the main focus now is on fiscal stimulus by governments.
House Speaker Nancy Pelosi said Monday that a fourth round of economic assistance worth at least $1 trillion should be launched to deal with the impact of the new outbreak. The rescue plan includes continuing to distribute cash to ordinary people, expanding unemployment insurance, small business loans and food relief, she said. So far, the United States has introduced three rounds of economic aid bills involving more than $2.3 trillion.
Japan on Tuesday announced a series of new economic emergencies in a rare move. As Prime Minister Shinzo Abe declared a state of emergency, Japan on Tuesday announced a record Y108.2 trillion stimulus package to protect the economy from the growing outbreak of the new crown. The stimulus package is equivalent to 20 per cent of Japan’s annual economic output, highlighting the extent to which policymakers expect the economy to suffer.
Eurozone finance ministers will hold an emergency meeting. Eurozone finance ministers may agree on stimulus measures of more than 500 billion euros on Tuesday to deal with the impact of the coronavirus outbreak on the euro zone economy, but plans to issue bonds jointly may require more negotiations, Reuters reported.
In a letter to European finance ministers, Eurogroup Chairman Centeno warned earlier that the virus pandemic would have budget costs corresponding to the “huge impact” of the outbreak, and that the euro zone would inevitably be saddled with high debt sprees after emerging from the crisis, and that it must be wary of the threat of division.
Tesla plans to launch a long-range Model 3 made in China this week.
Halliburton said it would slash jobs.
Boeing plans to conduct another test of the Starliner manned spacecraft.
Exxon Mobil CEO John Woods has pledged to keep the dividend.
Macy’s Chief Financial Officer Paula A. Price will leave the company.
Barclays cut its Twitter target to $22 from $35.
Apple is considering buying NEXTVR, a VR live-streaming service, for $100 million.
Ali after 11 years to restart the “Spring Thunder Plan” to help small and medium-sized enterprises.
Asia-Pacific stocks rose on Tuesday. European stock markets, Germany, France, Italy and other stock indexes from the March 18 closing level of more than 20%, have entered a technical bull market.