Equities Gain on Virus Treatment Hope; Bonds Fall: Markets Wrap

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Equities Gain on Virus Treatment Hope; Bonds Fall: Markets Wrap

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Stocks rallied globally and bonds slipped amid hopes for a breakthrough in fighting the coronavirus. Crude oil advanced with industrial metals.

Futures on the three main American indexes all turned higher and the Stoxx Europe 600 Index rebounded after a string of reports on possible vaccines or treatments for the deadly pathogen. Contracts on the S&P 500 Index climbed as Tuesday’s the surge in tech stocks continued in premarket trading for Apple Inc. and Nvidia Corp. Gilead Sciences Inc. edged lower after jumping this week on speculation over its antiviral drug.

Asian equities notched their first back-to-back daily gain in two weeks, even as quarantines were set up from the Chinese home of iPhone maker Foxconn to a cruise ship off Japan to land borders in Hong Kong and U.S. military bases. Crude oil headed for its first gain in six sessions in New York trading. Havens including the yen, Swiss Franc and Treasuries all slipped.

Investors are riding optimism from earlier this week while weighing the latest reports on containing the virus and corporate warnings about its impact. United Airlines and American Airlines both suspended flights to Hong Kong for a time due to a drop in demand. More central banks signaled a willingness to act if the virus undermines demand, inflation and financial markets.

Sky News reported early Wednesday that U.K. scientists have made significant progress in a vaccine for the virus that’s infected more than 24,000 people and remains concentrated in central China. Chinese researchers have applied for a local patent on an experimental Gilead drug that they believe might fight the pathogen.

“Against a somewhat improved backdrop, markets appear healthier this morning,” said Nema Ramkhelawan-Bhana, an analyst at Firstrand Bank Ltd. In Johannesburg. “Investors appear less fearful of the secondary effects of the virus despite travel restrictions still being in place, suggesting that, though harmful, the impact on the global economy will be short-lived.”

Elsewhere, Singapore’s dollar fell after that city’s central bank said there was room for easing. Tesla Inc.’s stock held steady in the pre-market after earnings, approaching the midpoint in a parabolic week for the electric-car maker’s shares. One China supplier climbed by the 10% limit for a second day Wednesday, helping the ChiNext Index recoup post-Lunar New Year losses.

Here are some key events coming up:

Democrats will release further results on the Iowa caucuses, which so far signal Pete Buttigieg as a top early presidential contender from the party.U.S. President Donald Trump looks set for acquittal on Wednesday in the Senate’s impeachment trial.The Reserve Bank of India’s interest rate decision is due Thursday.German factory orders for December are due Thursday, followed by industrial production on Friday.The U.S. employment report for January is set for Friday release.

And these are the main moves in markets:

Stocks

Futures on the S&P 500 Index climbed 0.7% as of 6:40 a.m. New York time.Nasdaq 100 Index futures increased 0.9%.The Stoxx Europe 600 Index gained 1%.The MSCI Asia Pacific Index rose 0.7%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The British pound gained 0.2%.The euro dipped 0.2% to $1.1022.The Japanese yen weakened 0.1% to 109.61 per dollar.

Bonds

The yield on 10-year Treasuries increased two basis points to 1.62%.The yield on two-year Treasuries rose two basis points to 1.43%.Britain’s 10-year yield gained four basis points to 0.603%.Germany’s 10-year yield climbed two basis points to -0.38%.

Commodities

West Texas Intermediate crude increased 2.6% to $50.89 a barrel.LME nickel rose 2.6% to $13,180 per metric ton.LME copper climbed 1.8% to $5,722 per metric ton.LME zinc gained 2.3% to $2,217 per metric ton.

–With assistance from Adam Haigh.

To contact the reporter on this story: Todd White in Madrid at [email protected]

To contact the editors responsible for this story: Christopher Anstey at [email protected], Robert Brand

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