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Super-charged global stocks race towards second weekly gain

Stock MarketsApr 17, 2020 08:35AM ET
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2/2 © Reuters. Man wearing a face mask is seen inside the Shanghai Stock Exchange building, as the country is hit by a novel coronavirus outbreak, at the Pudong financial district in Shanghai 2/2

By Marc Jones

LONDON (Reuters) - World stock markets made a super-charged sprint towards a second straight week of gains on Friday after President Donald Trump laid out plans to gradually reopen the coronavirus-hit U.S. economy following similar moves elsewhere.

The bulls were back in business, with reports that patients with severe COVID-19 symptoms had responded positively to a drug made by U.S. company Gilead Sciences (O:GILD) giving traders an extra excuse to brush off a widely expected slump in Chinese GDP data.

Europe's main markets (FTSE) (GDAXI) and Wall Street futures rose more than 3%, putting the pan-regional STOXX 600 (STOXX) up nearly 8% over the last two weeks and MSCI's 49-country world index <.MIWD00000PUS.> 23% off last month's four-year lows.

"The market continues to look through terrible data... on anticipation of economies reopening," said Steen Jakobsen, Chief Investment Officer at Saxo Bank. "And hopes that a new drug treatment will help lift longer-term uncertainty about the COVID-19 pandemic."

Nearly 150,000 people have now died from the disease, while Friday's data from China had shown the world's second-largest economy had contracted for the first time since recognised records began in 1992.

Gross domestic product (GDP) shrank 6.8% in the quarter year-on-year, slightly more than expected, and 9.8% from the previous quarter. Chinese retail sales also fell more than expected in March, but industrial output dipped only slightly, suggesting manufacturing may be recovering more quickly.

Asia had had a strong session. Tokyo's Nikkei <.225> and Seoul's KOPSI (KS11) both closed up over 3% and industrial metal copper, seen as something of a bellwether of global economic health, was up nearly 4% for the week.

Investors are now looking at how the lockdowns that have caused the economic numbers to crash are being gradually lifted.

Following plans announced by China and Germany, Italy, Spain and some other parts of Europe this week, Trump laid out guidelines on Thursday for U.S. states to emerge from shutdowns in a staggered, three-stage approach.

"We are not opening all at once, but one careful step at a time," Trump told reporters at the White House.

The dollar edged up to a 10-day high on the euro. Gilead Sciences' (O:GILD) shares surged almost 12% in premarket Wall Street trading meanwhile following a report that partial data on its experimental drug remdesivir showed it might help patients with severe virus symptoms.

Graphic - World stocks shaking off the virus?: https://fingfx.thomsonreuters.com/gfx/mkt/dgkpleqyvbx/Pasted%20image%201587123642847.png

EURO FIGHTERS

There was still plenty of gloomy news to navigate, however.

Credit rating firm S&P Global downgraded another clutch of countries hit by the coronavirus and warned that even triple-A and other top-rated nations could be cut depending on how they manage the longer-term consequences of the pandemic.

Back in Europe though, Italy's government bonds, which have been under pressure as the country's virus difficulties push its debt-to-GDP ratio towards 150%, rallied again as France expressed support for joint euro zone debt issuance.

European countries have "no choice" but to set up a fund that "could issue common debt with a common guarantee", French President Emmanuel Macron told the Financial Times on Thursday. Failure to do so would lead to populists winning elections in Italy, Spain, and possibly France, he also warned.

Yields on ultra-safe 10-year U.S. Treasuries (US10YT=RR) and German Bunds rose slightly, while Treasury futures (TYc1) and the dollar rose slightly as investors returned to a cautious view about the economic impact of the pandemic and lockdown measures. The safe-haven yen regained some lost ground.

Spot gold fell 1.5% to $1,690 per ounce too and with investors looking to take on more risk, copper's jump put it on track for its best week since February 2019.

No such luck for battered oil markets, however.

U.S. crude futures (CLc1) slumped as much as 8% to an 18-year low after OPEC lowered its global demand forecast on Thursday.

Brent (LCOc1) was whiplashed too, swinging back under $28 a barrel having been up nearly 3% only to then stage another fight back.

OPEC now sees a contraction of global demand of 6.9 million barrels per day (bpd) this year due to the coronavirus outbreak.

"Downward risks remain significant, suggesting the possibility of further adjustments, especially in the second quarter," OPEC said of the demand forecast.

Graphic - China GDP contributions: https://fingfx.thomsonreuters.com/gfx/mkt/12/8043/7974/Pasted%20Image.jpg

Super-charged global stocks race towards second weekly gain
 

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Comments (13)
Joe Ruscigno
Joe Ruscigno Apr 17, 2020 11:16PM ET
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Is the market aware of the 22 million people who just got fired?
Max German
MaxiGE Apr 17, 2020 8:19AM ET
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super charged on hope and optimism is just big manipulation
Get Sirius
Get Sirius Apr 17, 2020 8:19AM ET
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Unfortunately first they gonna take Your money no matter what position You have because they have all invested details infront of their eyes. They can see all positions and how many retail traders are on market. Then they move market as long as it takes to steal Your money, than dropp is coming. Make reach people reacher. America first.
Get Sirius
Get Sirius Apr 17, 2020 6:35AM ET
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Of course now china economy and its shrank is not important like week ago when manufacturing was better in china dow rised. Now dow rised on trump guidelince ??? It is easy to see that all market is lie and that we all will feel shock because of Trump liers
Kaloyan Mladenov
Kaloyan Mladenov Apr 17, 2020 4:31AM ET
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no it doesn't offset anything and you can't run away from reality forever.
Get Sirius
Get Sirius Apr 17, 2020 4:31AM ET
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Trump don’t want to run forever just till november. But every minut is like year to him and I must admin he is fighting like a lion. Unfortunately downturn will come because there is no economy, economy is finished
Buzzy Jefferson
Buzzy Jefferson Apr 17, 2020 4:31AM ET
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Get Sirius   - Did you even finish grade school?
Varga Róbert
Varga Róbert Apr 17, 2020 4:07AM ET
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So the markets think that the weight of economy reopen is much more than actual GDP? Joke....
Buzzy Jefferson
Buzzy Jefferson Apr 17, 2020 4:07AM ET
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@Varga - Are you here to practice your deplorable English, or just to annoy Americans?
Nicholas Jack
Nicholas Jack Apr 17, 2020 1:10AM ET
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Merica!! Merica only can move the whole world markets up
steven gitt
steven gitt Apr 17, 2020 12:22AM ET
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coronavirus has taught me that people actually working and producing is optional for the stock market to go up
Robert smith
Robert smith Apr 17, 2020 12:22AM ET
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You're getting closer to the truth. Which is that with technology taking over every aspect of our lives. The vast majority of workers jobs are disappearing forever, for the RICH people in GENERAL are just becoming more and more of an unnecessary pain in their asses. If I was the conspiracy theorist type id say covid19 was just the trial run of the first population reducer. Because there's already about 5 billion people more than the rich need. maybe their answer to global warming is to remove 60 percent of the population and then you don't NEED to spend anything to get this planet green and clean again. Have you ever thought that its NOT just brick and mortar stores that are becoming extinct, very soon, the middleman will be unnecessary. Want a camera? You don't pay $150 markup to a store, and you don't buy from AMAZON either, you buy it DIRECT from Cannon. want a car? You don't pay a $6000 commission to a dealership, you buy it from the MAKER. It will be that way with EVERYTHING soon.
Vorlon Firstone
Vorlon Firstone Apr 16, 2020 10:24PM ET
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China data = Fake data
Bill Chan
Bill Chan Apr 16, 2020 10:24PM ET
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US cartoon data
Sunny Offgrid
Sunny Offgrid Apr 16, 2020 8:28PM ET
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Chinese said that they had 3000 dead people. In reality, 40000. So numbers from china...fake people. Just look at that big, big ghost city that they made and nobody lives there. These people are soo funny. Just to bad they are fake, they could rule the world !
Show previous replies (4)
Edward Chong
Edward Chong Apr 16, 2020 8:28PM ET
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which big city is empty? can u give a name???
Tre Hsi
Tre Hsi Apr 16, 2020 8:28PM ET
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Kyle Pasta  "trump made them stop manipulating their currency..."  did he now?  tell us what did The Donald do to make China manipulating their currency???
Tre Hsi
Tre Hsi Apr 16, 2020 8:28PM ET
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dinosaur princess  "how could u know they had 40000 death toll?", yeah I like it when people complain about China's fake number by giving another fake number as evidence......
Tre Hsi
Tre Hsi Apr 16, 2020 8:28PM ET
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johnny tng  well, The Donald idid say everything was totally under control, the 20 cases will soon go down to 5 and then zero.  But of course that's after he said the whole thing was a liberal media hoax anyway
Robert smith
Robert smith Apr 16, 2020 8:28PM ET
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Tre Hsi  -Touche' buddy.  you know its a *****shame what one lousy president has done to this country. Its like I woke up one morning to find I was  living in a country where facts and truth just didnt matter any more. The name of the game now is, don't bother learning anything about anything before you speak, - just invent your facts and statistics on the spot, treat everyone as though they are as ignorant and gullible as Trump supporters, and just lie straight in their faces.nobody was interested in discussing anything with them. Facts and stastics are now nothing more than alternate realities you create to win arguments or justify your crimes.
Sunny Offgrid
Sunny Offgrid Apr 16, 2020 8:23PM ET
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Twilight Zone. This is soo funny... lol
Robert smith
Robert smith Apr 16, 2020 8:23PM ET
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Thats perfect! "You are about to enter another dimension..." -Welcome to the Trump zone.
Chris Martin
Chris Martin Apr 16, 2020 8:20PM ET
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So, recently China says they stopped trials of GILD (didn't work-as inconclusive) Remdesivir-U.S. stock market does down. A day later we receive news "R" seems to work??? A day later? Any person think they fed a "story" to us, went all in on ALL stocks they knew would fall on news from a giant (communist) nation as theirs? Who's in?
Buzzy Jefferson
Buzzy Jefferson Apr 16, 2020 8:20PM ET
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sounds about right..
Chris Martin
Chris Martin Apr 16, 2020 8:11PM ET
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xcrew their news. kinda like chinese handcuffs
Mike ND
Mike ND Apr 16, 2020 7:56PM ET
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Fake data day!
 
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