Global stocks rise after US Fed promises economic support

Daniel Fowler
March 24, 2020

The energy sector surged 6.9% as oil prices jumped.

All three main USA stock indexes jumped more than 5%, bouncing back from a brutal selloff in the previous session on fears of a deep global recession as entire nations shut down to prevent the virus from spreading.

South of the border, USA stocks jumped more than five per cent as Congress appeared close to a deal on an unprecedented spending bill to prop up the slumping economy.

The severity of the spread of COVID-19 and the expectations of aggressive stimulus measures have been mirrored in financial markets with the S&P 500 gaining more than 9% in one session only to plunge 12% the following day.

In the USA, sentiment appears to have been boosted after top congressional and White House officials emerged from grueling negotiations over a almost $2 trillion coronavirus rescue package saying they expected to reach a deal Tuesday. "There is a plan, and the world will continue going on tomorrow and the next day, the next week", said Jake Dollarhide, chief executive officer at Longbow Asset Management in Tulsa, Oklahoma.

A separate proposal from Democrats in the U.S. House of Representatives to grant airlines and contractors a $40 billion bailout helped lift shares of American Airlines, Delta Airlines and United Airlines by about 10% in premarket trading.

US surveys of manufacturing and services sector activity, due later in the day, are also likely to show a similar plunge. Its shares have lost almost two-thirds of its value so far in 2020.

Veteran Afro-jazz star Manu Dibango dies after contracting coronavirus
In 2009 he filed a lawsuit against Michael Jackson , accusing the American singer of stealing a hook from his hit Soul Makossa . As per reports, Dibango's music publisher, Thierry Durepaire the star died early morning on March 24 in the Paris region.

Investors say they ultimately need to see the number of new coronavirus infections peak before markets can find a bottom.

Senator Charles Schumer and Treasury Secretary Steven Mnuchin were close to a deal on a $2-trillion stimulus bill, according to reports, which cited a conference call Schumer had Monday evening with Democratic leaders.

Data on Monday showed US business activity hit a record low in March, bolstering expert views that the economy was already in a recession.

At 08:20 a.m. EDT, Dow e-minis were up 723 points, or 3.91%, S&P 500 e-minis were up 87.75 points, or 3.95% and Nasdaq 100 e-minis were up 269 points, or 3.85%.

This comes after high-ranking US Senate and White House officials appeared set to reach a $2 trillion deal to rescue the American economy from the crisis caused by the coronavirus outbreak.

The market was substantially off the day's highs, however, and analysts remained pessimistic that oil prices would stage an extended recovery amid the worsening coronavirus pandemic and the ongoing oil price war between Saudi Arabia and Russian Federation.

The S&P 500 was up 5.4 per cent early on Wednesday morning. Gasoline futures, meanwhile, soared over 30% earlier in the session and were now trading up around 24%.

Other reports by

Discuss This Article

FOLLOW OUR NEWSPAPER