A man stands in front of an electronic bulletin board showing the Nikkei 225 index of Japan in a securities company on Wednesday April 8, 2020 in Tokyo. The Asian shares were mainly lower after shooting at the start of the session in a climate of uncertainty about the coronavirus epidemic. The Japanese Nikkei 225 advanced on Wednesday morning, but the benchmarks in Australia, South Korea and China are lower.
Equities were mixed in Asia on Thursday after a 3.4% gain on Wall Street overnight, with investors choosing a positive direction for the data on the trajectory of the coronavirus epidemic.
Japan’s Nikkei 225 index lost 0.4% after the central bank governor said the economy was facing “extremely high” uncertainty about the likely impact of the pandemic. Stocks rose in Hong Kong, Sydney and Shanghai.
Recent upward market swings have overshadowed the declines as deaths and infections may approach a peak or plateau in some of the most affected regions of the world.
This has led some investors to start looking at the other side of the economic downturn that is hitting the world as authorities try to slow the spread of the coronavirus. The S&P 500 has jumped almost 23% in the past two and a half weeks, building on previous gains driven by massive amounts of aid pledged by governments and central banks for the economy and the markets.
“Risk assets have continued to rally around the perception that the global economy will reopen faster than expected,” said Stephen Innes of AxiCorp in a comment.
The prospect of progress in talks between oil producers was a big driver of Wednesday’s rally, as well as signs of viral infections stabilizing in several global hotspots and increased clarity in the US presidential race, said Adam Taback, chief investment officer of Wells Fargo Private. Bank.
Oil prices have been even more volatile than stocks recently, with Russia and Saudi Arabia fighting over production levels as demand wanes. Oil producers are expected to meet on Thursday and an announcement of production cuts to support crude prices is possible.
“The icing on the cake, … a” good “result for oil prices from the OPEC + meeting would be a global agreement to reduce production … beyond OPEC and Russia , although concerns about demand persist, “said Innes.
US benchmark crude oil rose 70 cents to $ 25.79 a barrel in electronic trading on the New York Mercantile Exchange Thursday morning. It gained $ 1.46, or 6.2%, to settle at $ 25.09 per barrel on Wednesday, recovering part of its 9.4% drop from the previous day.
Brent crude oil, the international standard, rose 44 cents to $ 33.28 per barrel. It gained 97 cents, or 3%, at $ 32.84 a barrel in London.
Many analysts say they are skeptical about the recent rally in stocks given the uncertainty that remains. The death toll continues to rise, millions of people lose their jobs every week and the economic suffering is global.
The Nikkei 225 fell to 19,268.26 after opening higher on Thursday. Equities also fell in Taiwan, Malaysia and Indonesia.
But the futures for the S&P 500 and the Dow industrials have edged up. The Hong Kong Hang Seng added 0.4% to 24,075.85 and the Shanghai composite index gained 0.3% to 2,825.00. In Australia, the S & P / ASX 200 rose 1.8% to 5,302.30 and the Kospi of South Korea rose 0.8% to 1,890.92.
Optimism increased in the United States on Wednesday after Dr. Anthony Fauci, America’s top infectious disease expert, said the White House was working on plans to ultimately reopen the country. President Donald Trump said later that “it will be sooner than later”.
“It’s good that people are talking about reopening the economy,” said Jeff Buchbinder, equity strategist for LPL Financial. “The more we can focus on what the economy will look like in several months, the better it will be for the markets.”
The S&P 500 climbed 3.4% to 2,749.98. The Dow Jones Industrial Average also increased 3.4% to 23,433.57. The Nasdaq added 2.6% to 8,090.90.
The most battered stocks since the sale started in February helped lead the way, including energy companies, retailers and travel companies.
The spread increased by 12.6%, United Airlines gained 12.4% and Diamondback Energy increased by 13.5%, as investors imagined that people would shop again in stores, take the plane for the holidays and go to the office once the home orders are released. So far, the three are still down more than 50% for 2020.
Health insurers’ and other stocks got an extra boost after Bernie Sanders suspended his presidential campaign. Investors were wary of Sanders’ Medicare For All proposal and other plans that could have limited profits.
Another rebound came in the afternoon after the Federal Reserve released minutes from last month’s political meeting which confirmed that the Fed will do whatever it takes to support the markets, said Bob Miller, manager. fundamental fixed income securities of the Americas at BlackRock.
Companies are also preparing to report their financial results for the first three months of the year in the coming weeks. The numbers are likely to be grim, and investors don’t know how long it will last.
Yields on Treasury bills, which signaled concerns about the economic damage caused by the pre-market coronavirus epidemic, were relatively stable. The 10-year Treasury yield was 0.75%, against 0.76% on Wednesday evening.
Nearly 1.5 million cases of COVID-19 have been confirmed worldwide, including more than 432,000 in the United States. More than 88,000 people have died from the virus, while nearly 330,000 have recovered, according to a count from Johns Hopkins University.