The stock market had its worst day in almost 30 years this week, as coronavirus fears swept the markets.
The historic sell-off on Wall street this week helped to wipe out most of the big USA gains since President Trump took office in 2017.
Friday’s rally only partly erased the damage from a rout that left US equities in a bear market less than a month after reaching record highs in February. Norwegian Cruise Line and Royal Caribbean Cruises both lost roughly a third of their value.
“What we’re headed for is a market that should begin to settle down (with) investors now expecting the government to get the economic plan in place and get it into law”, said Peter Cardillo, chief market economist at Spartan Capital Securities in NY.
Apple Inc rose 3.9 per cent as the iPhone maker said it would reopen all 42 of its branded stores in China. The blue-chip index dipped as he started his sometimes rambling comments, but then surged as he brought a series of public health experts to the microphone. In Bangkok, the Thailand SET fell 1.3% after its 10% plunge triggered a temporary suspension of trading.
MSCI’s gauge of stocks across the globe gained 5.27 per cent after falling by the largest percentage on record on Thursday.
Gap Inc climbed 8.7% as it forecast 2020 profit above market expectations.
It also flagged a $US100 million ($A159 million) sales hit in Asia and Europe from the outbreak.
Advancing issues outnumbered declining ones on the NYSE by a 4.73-to-1 ratio; on Nasdaq, a 2.95-to-1 ratio favored advancers.
The S&P index recorded no new 52-week high and 14 new lows, while the Nasdaq recorded one new high and 153 new lows. The House of Representative was due to vote on the package shortly. Jay Powell and group are putting us at a decided economic & physiological disadvantage.
European markets lost 12% in one of their worst days ever, even after the European Central Bank pledged to buy more bonds and offer more help for the economy.
The mood of the news conference was more upbeat than Trump’s somber address to the nation on Wednesday night, when he announced an unexpected ban on many foreign travelers from Europe, and didn’t lay out the specifics for an economic recovery package that investors were waiting for.
US stock futures also pointed to a higher open, with Nasdaq futures up 5%.
The indexes were still about 25% below record highs hit in mid-February, and were on track for their biggest weekly declines since October 2008, the height of the financial crisis.
MSCI’s main European index was up 6.5% by 1145 GMT, after having fallen more than 20% over the previous four sessions.
Stock futures fell in overnight trading, an early indication of the pain to come. Japan’s Nikkei plummeted more than 9%, while Australia’s S&P/ASX 200 dropped 8%. India’s Sensex index rose 4.8% after the Reserve Bank of India also said that it would inject cash into markets.
“Central banks must bolster confidence that they are willing to test the limits of where they view the effective bound on rates”, JPMorgan Chase economists said in a note this week.
Bond yields moved broadly higher, a signal some investors were pulling back, at least for now, from seeking less-risky assets.
“Underlying concerns regarding the economic fallout from the coronavirus on credit markets broadly remain”, said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.
“Lagarde has no experience with markets and that became obvious yesterday”, said Christoph Rieger, head of rates and credit research at Commerzbank. In Italy, which is on a lockdown, the death toll has topped 1,000, with more than 15,000 confirmed cases. The virus has killed 41 people in the United States.