GLOBAL MARKETS-Global stocks jump on Fed stimulus, hopes pandemic is slowing

Published 09/04/2020, 15:08
Updated 09/04/2020, 15:12
© Reuters.

By David Randall
NEW YORK, April 9 (Reuters) - Global equity benchmarks
gained on Thursday following signs that governments and central
banks are taking additional steps to bolster their economies as
measures to slow the spread of the COVID-19 pandemic appear to
be working.
Oil futures surged again on expectations that Russia and
OPEC countries were prepared to cut production, though investors
were hesitant to move out of the perceived safety of government
bonds.
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 1.90% following broad gains in Europe and Asia.
On Wall Street, the Dow Jones Industrial Average .DJI rose
520.36 points, or 2.22%, to 23,953.93, the S&P 500 .SPX gained
56.51 points, or 2.05%, to 2,806.49 and the Nasdaq Composite
.IXIC added 133.05 points, or 1.64%, to 8,223.95.
Gains in the United States were bolstered after the Federal
Reserve announced a $2.3 trillion effort to bolster local
governments and small to medium-sized businesses. The U.S.
central bank said that it would begin buying municipal bonds
issued by state and local governments in order to help them
respond to the health crisis. The S&P 500 is up more than 10% since the start of the
holiday-shortened week.
"Sentiment remains volatile, but investors appear to be
looking through the growing headline numbers of COVID-19 cases
and focusing on signs that the spread of the pandemic is being
brought under control, which in turn is underpinning hopes for a
relatively swift relaxation of containment measures," said Mark
Haefele, chief investment officer at UBS Global Wealth
Management.
On Wednesday, New York Governor Andrew Cuomo said the
state's efforts at social distancing were working in getting the
virus under control in one of the biggest hot spots in the
United States. U.S. President Donald Trump said he would like to reopen the
American economy with a "big bang" but that the death toll from
the coronavirus first needs to be heading down. The euro gained against the dollar EUR=D3 on hopes euro
zone finance ministers would agree on more support for their
coronavirus-hit economies. Yet concerns about the toll of the slowdown measures on the
global economy kept a lid on a broad move into riskier assets
after U.S. jobless claims data exceeded 6 million for the second
straight week, according to data released on Thursday.
Benchmark 10-year notes US10YT=RR last rose 1/32 in price
to yield 0.7603%, from 0.764% late on Wednesday.
"We're probably on pace to lose more jobs in April alone
than we lost during the entire Great Recession," said Dante
DeAntonio, senior economist at Moody's Analytics in New York.
"It's important to keep reminding ourselves how unprecedented
this is, even though it seems like everyone has become numbed
to it after just three weeks of seeing these outrageously large
numbers.”
The Organization of the Petroleum Exporting Countries and
its allies, including Russia - a group known as OPEC+ - are set
to convene a video conference meeting on Thursday.
Hopes of an agreement to cut 10 million to 15 million
barrels per day (bpd) rose after media reports suggested Russia
was ready to reduce its output by 1.6 million bpd. O/R
U.S. crude CLc1 rose 6.74% to $26.78 a barrel. Brent crude
LCOc1 rose 4.26% to $34.24 per barrel.

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