Stocks clung to gains globally along with US equity futures on Wednesday while investors examined government rescue packages to counter the hit from the coronavirus, after one of
the best days on Wall Street in a generation.
Futures on the three main American equity indexes fluctuated before turning higher in the wake of March 25’s historic surge, after the White House and Congress agreed on a fiscal package of more than $2 trillion. Equity markets across Europe and the UK rose almost in lock-step, though they pared the advance as euro-region leaders closed in on a stimulus accord. Shares in Asia headed for their best one-day increase since 2008.
WTI crude oil climbed towards $25 a barrel and then pared gains. Treasuries were steady. The dollar fell for a second day versus its biggest peers including the euro. The single currency added to March 25’s gain as Germany took a step towards declaring a state of emergency to unlock a historic rescue package. A Bloomberg gauge of financial conditions loosened for the first time in six sessions.
Investors are on watch for whether US and global equity indexes can post their first back-to-back daily gains since the rout began a month ago, even as economies from Delhi to Milan and Seattle reel from the deepening pandemic. The number of infections globally continues to mount. India tries to lock down as many as 1.3 billion people, set to join many of the largest economies that have started to slow to a crawl.
On March 24, the Dow Jones Industrial Average rose more than 11% to clock its biggest advance since 1933, while the S&P 500 climbed the most in
12 years. Still, key gauges of US manufacturing and services in March fell the most on record, showing the deep toll the outbreak has already taken.
“The actions of monetary and fiscal policymakers should help us prevent a Global Financial Crisis-style credit crunch,” Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote to investors.
“The sharp equity rally shows that the combination of central banks’ entire playbook and substantial, direct fiscal support can be well-received by markets.”
US President Donald Trump’s administration reached a deal with Senate Democrats and Republicans on a package to combat the fallout of the virus that Senate Majority Leader Mitch McConnell said was expected to be passed on Wednesday.
Spot gold drifted lower after a squeeze of historic proportions pushed its prices to the biggest one-day gain since 2008. The closure of refineries and demand for physical gold had caused a disconnect between prices in London and New York.
Futures on the S&P 500 Index rose 0.9% in London. The Stoxx Europe 600 Index climbed 1.8%. The MSCI Asia Pacific Index rose 5.6%.
The Bloomberg Dollar Spot Index declined 0.8%. The euro climbed 0.5% to $1.0838. The British pound gained 1.6% to $1.195. The Japanese yen fell 0.1% to 111.31 per dollar.
The yield on 10-year Treasuries decreased less than one basis point to 0.84%. Gold decreased 0.7% to $1,620.59 an ounce. West Texas Intermediate crude rose 0.1% to $24.04 a barrel.