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World equity markets edge higher despite oil plunge to 2002 lows

Stock MarketsMar 30, 2020 10:35AM ET
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2/2 © Reuters. Passersby wearing protective face masks are reflected on a screen displaying stock prices outside a brokerage in Tokyo 2/2

By David Randall

NEW YORK (Reuters) - Global equity benchmarks rose slightly on Monday despite a drop in oil prices to their lowest levels since 2002, as central banks and the United States tried to contain damage from the rapidly spreading coronavirus that has upended the global economy.

U.S. President Donald Trump on Sunday extended the government's stay-at-home guidelines until the end of April, dropping a sharply criticized plan to get the economy up and running by mid-April after a top medical adviser said more than 100,000 Americans could die from the outbreak.

JPMorgan (NYSE:JPM) now predicts that global gross domestic product (GDP) - the total monetary value of all goods and services produced - could contract at a 10.5% annualized rate in the first half of the year. As a result, central banks have mounted an all-out effort to bolster activity with interest rate cuts and massive asset-buying campaigns, which have at least eased liquidity strains in markets.

China on Monday became the latest to add stimulus, with a cut of 20 basis points to a key reverse repo rate, the largest in nearly five years.

MSCI's gauge of stocks across the globe gained 0.18% following slight gains in Europe and broad declines in Asia.

In early trading, the Dow Jones Industrial Average rose 11.34 points, or 0.05%, to 21,648.12, the S&P 500 gained 18.52 points, or 0.73%, to 2,559.99 and the Nasdaq Composite added 78.54 points, or 1.05%, to 7,580.92.

"I have been in this business almost 30 years and this is the fastest correction I have seen," Swiss private bank Lombard Odier's chief investment officer, Stephane Monier, said of this year's plunge in global markets.

In oil markets, Brent futures were down 8%, or $2, at $22.50 a barrel - their lowest in 18 years. U.S. West Texas Intermediate (WTI) crude futures fell as far as $19.92, near a 2002 low hit this month.

Investors continued to seek the perceived safety of bonds, with bond yields falling in Europe and the United States. Benchmark 10-year notes last rose 35/32 in price to yield 0.6336%, down from 0.744% late on Friday.

The drop in yields has combined with efforts by the Federal Reserve to pump more U.S. dollars into markets, dragging the dollar off recent highs.

Rodrigo Catril, a senior FX strategist at National Australia Bank (NAB), said the main question for markets was whether all the stimulus would be enough to help the global economy withstand the shock from the coronavirus pandemic.

"To answer this question, one needs to know the magnitude of the containment measures and for how long they will be implemented," he added.

"This is the big unknown, and it suggests markets are likely to remain volatile until this uncertainty is resolved."

World equity markets edge higher despite oil plunge to 2002 lows
 

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Comments (9)
Midway Eholdings
Midway Eholdings Mar 30, 2020 11:40AM ET
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Oil was killed before virus came calling
jemin An
jemin An Mar 30, 2020 11:24AM ET
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Today U.S market is out of sense itself, I don't believe DOW is now bottom cause still fog in virus batter and global financial crisis. Investors who put their money last week rally are only support today's market in the way of tweest by money power.
jemin An
jemin An Mar 30, 2020 2:58AM ET
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Maybe flash money bet in rally now, despite of POURING BAD EVENTS, I'll watch them closely how can they push until where.
Ramm Batts
Ramm Batts Mar 30, 2020 1:56AM ET
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Russia and Saudi hope the Virus destroys them
Nathan Brown
Nathan Brown Mar 30, 2020 1:08AM ET
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Those hoping for a swift return to record highs following the worst of the COVID-19 pandemic still to come are likely to be disappointed. There is no end in sight or a sign of a peak. Limited testing, delayed reaults (over 6 days in some cases) limited supplies (gloves and mask), and very limited ventilators adds up to a huge disaster and horrific numbers that are still to come. This is only the beginning...and the US has the highest number of COVID-19 cases in the world and climbing at rapid pace. There is too much to list regarding unrealistic market gains and false confidence, record unemployment, along with US companies who are over extended and much much more. The double edge sword to send americans back to work or prolonging state and federal quarantine, either one will prolong or decimate the economy with many more cases to come in which the COVID-19 shows no signs of slowing down and NO ONE KNOWS WHEN IT WILL GET BETTER OR STOP...ONLY GUESSES FROM TOP OFFICIALS.
Edward Chong
Edward Chong Mar 30, 2020 1:08AM ET
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wow u just sign an armageddon.
Nathan Brown
Nathan Brown Mar 30, 2020 1:08AM ET
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We can’t trade on hope. We must go by the facts.
john richards
john richards Mar 30, 2020 12:30AM ET
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Virus chills over, time for they are higher thanks to stimulus article.  As the last thing on earth it could be is encouraging virus data.
john richards
john richards Mar 29, 2020 9:45PM ET
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Untold is correct.  Time to tell the price of this always wrong insane leftist reaction-it is costing the US roughly $350billion/wk.  Europe probably similar, Asia probably similar-or $1.5trillion a week. Lowering the speed limit to 35mph would save more lives and cost less.
Kaveh Sun
Kaveh Sun Mar 29, 2020 9:33PM ET
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I own call and put. I dont care which way it goes. I loose If it stays the same.
Bob Ruckle
Bob Ruckle Mar 29, 2020 9:33PM ET
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With such high on beta at this time you lose on both ends Kaveh.
Justin General
Justin General Mar 29, 2020 8:06PM ET
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maybe it will fall 20% tomorrow? one can only hope..
James NZ
James NZ Mar 29, 2020 8:06PM ET
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I hope you fall on your face for wishing something like that.
Lake Lot
Lake Lot Mar 29, 2020 8:06PM ET
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I agree
 
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