'Markets are screaming for more': Stocks, oil, Treasury yields climb as hopes of a global coronavirus response grow
Stocks, oil, and Treasury yields rebounded on Friday as investors cheered central banks for boosting liquidity and hoped for a coronavirus rescue package in the US. Central banks in Norway, Japan, and Australia cut interest rates, bought government bonds, or took other expansionary measures. The US House of Representatives is expected to vote on legislation that improves unemployment benefits, ensures free virus testing, guarantees 14 days of paid sick leave, and helps poorer Americans as well as small- and medium-sized businesses. Visit Business Insider's homepage for more stories.
Stocks, oil, and Treasury yields recovered from Thursday's historic sell-off on Friday, as central bankers took action and US lawmakers moved closer to passing sweeping measures to combat the economic impacts of coronavirus. Norway's central bank cut interest rates and boosted market liquidity, the Bank of Japan purchased billions' worth of government bonds, and the Reserve Bank of Australia injected almost $6 billion into the nation's financial system, the Financial Times reported. Moreover, the US House of Representatives is expected to vote within hours on a rescue package expected to include better unemployment benefits, free virus testing, 14 days of guaranteed paid sick leave, tax credits to help small-and medium-sized businesses, and support for food assistance programs and Medicaid, the New York Times reported. Hopes of coordinated global action to combat coronavirus fueled the relief rally. However, analysts were skeptical that it would last. "Markets are screaming for more," Michael Every, senior Asia-Pacific strategist at RaboResearch, said in a research note. "It seems like there is nothing the policymakers can do to stop bleeding," Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a morning note. "There is little alternative to letting the knife hit the ground," she added. Here's the market roundup as of 10:05 a.m. in London (6:05 a.m. in New York):
European equities rallied, with Germany's DAX up 3.4%, Britain's FTSE 100 up 4.4%, and the Euro Stoxx 50 up 4%. Asian indexes closed lower. China's Shanghai Composite fell 1.2%, South Korea's KOSPI slumped 3.4%, Japan's Nikkei dropped 6%, and Hong Kong's Hang Seng fell 1.3%. US stocks are set to open higher. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq rose between 4% and 4.8%. Oil prices rose strongly, with West Texas Intermediate up 5.1% at $33.10 a barrel and Brent crude up 5.4% at about $35. The benchmark 10-year Treasury yield rose to 0.90%. Bitcoin plunged below $4,000 overnight, before rebounding to about $5,750. Join the conversation about this story » NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption
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Global stocks rise despite Fed's Powell warning that the coronavirus downturn could last until late 2021
Global stocks climbed on Monday as investors brushed off Federal Reserve chairman Jerome Powell's warning that...Global stocks climbed on Monday as investors brushed off Federal Reserve chairman Jerome Powell's warning that the coronavirus-fueled economic downturn could last until the end of next year. US oil prices jumped more than 5% to a 2-month high, passing $30 a barrel for the first time since prices turned negative in late April. Gold rose about 1% to its highest level in more than seven years. Visit Business Insider's homepage for more stories. Global stocks climbed on Monday as investors brushed off Federal Reserve Chair Jerome Powell's warning that the coronavirus downturn may linger until late 2021. In a "60 Minutes" interview on Sunday, Powell said that Americans should prepare for a prolonged US recovery as it would "take a while for us to get back." However, he remained optimistic about an economic rebound if there isn't a second wave of infections. Powell acknowledged that the unemployment rate could soar as high as 25%, but expressed confidence that government policies will be able to keep families solvent. "There's a lot more we can do...we're not out of ammunition by a long shot," he said. The comments reassured investors that the central bank can handle further economic fallout, analysts said. "This went some way to reversing the losses Powell provoked last week, when the Fed chair appeared to take negative interest rates off the table," Connor Campbell, a financial analyst at SpreadEx, said in a morning note. Read More: A Wall Street equity chief lays out 5 reasons why another 'significant drawdown' in stocks is coming right after the fastest crash in history Market sentiment likely benefited from easing of lockdowns in several countries and signs of a slowdown in the number of new coronavirus cases. It may also have been buoyed by the House of Representatives passing a second $3 trillion relief bill last week. However, the legislation may not be approved by the Republican-controlled Senate. Meanwhile, the prospect of further government support boosted stocks across the pond on Monday. "Giddy at the thought of some more monetary juice being pumped into the markets, European investors woke up with a spring in their step," Campbell said. Japan's Nikkei index also rose 0.5%, despite the release of official data on Monday showing the world's third-largest economy tumbled into its first recession since 2015. The nation's gross domestic product fell by 0.9% in the first three months of the year, after dropping 1.9% in the fourth quarter of 2019 — before lockdowns and restrictions were even implemented. Exports also fell the most since the crippling March 2011 earthquake. Read More: 'We have a depression on our hands': The CIO of a bearish $150 million fund says the market will grind to new lows after the current bounce is over — and warns 'a lot more pain' is still to come Here's the market roundup as of 11:25 a.m. in London (6:25 a.m. ET): European equities rose, with Germany's DAX up 2.7%, Britain's FTSE 100 up 2.1%, and the Euro Stoxx 50 up 2.1%. Asian indexes climbed with China's Shanghai Composite up 0.2%, Hong Kong's Hang Seng up 0.6%, and Japan's Nikkei up 0.5%. US stocks are set to open higher. Futures underlying the Dow Jones Industrial Average, the S&P 500, and the Nasdaq rose between 1.2% and 1.5%. Oil prices jumped, with West Texas Intermediate up 7% at $31.60, and Brent crude up 5.6% at $34.30. The benchmark 10-year Treasury yield rose to 0.64%. Gold rose 0.9% to $1,772, its highest level in more than seven years. Read More: GOLDMAN SACHS: Buy these 14 stocks poised to surge in an economic recovery because of their limited exposure to consumersSEE ALSO: Fed Chairman Jerome Powell says economic downturn could last until late 2021 Join the conversation about this story » NOW WATCH: Pathologists debunk 13 coronavirus myths
The European Central Bank will pay banks to lend money after the economy shrank the most...The European Central Bank will pay banks to lend money after the economy shrank the most in decades. The worst is yet to come, the eurozone’s top central banker warned.
The nation’s banks, long at the center of worries about European finance, look more likely to...The nation’s banks, long at the center of worries about European finance, look more likely to get a rescue.