US stocks jump on signs coronavirus is slowing
US stocks have surged for the second day as investors cheer signs that the coronavirus outbreak may be slowing and that lockdowns may soon be eased.
Wall Street’s major stock indices all opened sharply higher. The Dow Jones was up 3.8 per cent in early trading and the S&P 500 was up 3.2 per cent. The Nasdaq was 2.8 per cent higher.
European shares were also in the green for the second day running. The UK’s FTSE 100 was up 3.5 per cent and Germany’s Dax was 3.7 per cent higher. The pan-European Stoxx 600 had risen 2.7 per cent.
Governors in several of the worst-affected US states have suggested coronavirus could be starting to slow.
New York’s governor Andrew Cuomo said yesterday that the number of cases in his state has been “effectively flat for two days”.
Meanwhile, the number of daily new cases has fallen in Italy, Spain, Austria and Germany. This has caused governments to contemplate loosen lockdown measures.
Austria is set to ease some of its restrictions next week. It will prove a test case for other countries aiming to do the same.
Global stocks still face uncertainty
“This is the moment investors have been waiting for, a time when they can start to put a date on normality and in some way quantify the damage,” said Craig Erlam, senior market analyst at currency firm Oanda. Yet he said it is “too early to declare victory”.
Paul Donovan, chief economist at UBS Global Wealth Management, said markets still face a great deal of uncertainty.
Donavan said uncertainty has been compounded by a lack of up-to-date economic data, he said. “Thus, the polite fiction that markets are always forward looking is replaced by markets trading on sentiment rather than economics for now,” he said.
Investors sold so-called safe-haven assets as they returned to equities. The dollar, which has risen due to desire to hold cash, fell 0.8 per cent on DXY index.
Yields on the US 10-year Treasury bond rose seven basis points (0.07 percentage points) to 0.748 per cent. Yields rise as prices fall.