(Bloomberg) — Global stocks rose back within 1% of an all-time high on optimism the global economy will weather the hit from the coronavirus, sentiment that was strengthened Thursday by China’s plans for tariff cuts on U.S. imports.
An MSCI Inc. index of world stocks headed for a fourth straight day of gains, with Asian benchmarks including Japan, Hong Kong and South Korea up more than 2%. U.S. and European futures climbed. The yuan extended gains after China said it will lower levies on $75 billion of U.S. goods next week, though later came off its highs. Oil rose toward $52 a barrel in New York, while 10-year Treasury yields retained recent gains.
Investor sentiment strengthened Wednesday after a string of reports on possible vaccines for the virus, though the World Health Organization later said there are no proven therapeutics. The latest rally has seen some, including Citigroup Inc. strategists, warn about signs of complacency in markets given that the full impact of the deadly corovirus is unclear.
Others flag support from policy makers, and recent indicators showing that the trajectory of growth was solid before the virus struck. A private report Wednesday showed U.S. companies’ payrolls jumped more than forecast in January.
“Companies are going to continue to struggle in the short term” with disruptions and forgone business due to the virus, said Joe Zidle, chief investment strategist at Blackstone Group Inc. But China’s moves in recent days to reopen markets and inject stimulus “gave global investors a degree of confidence that the Chinese policy makers had at least taken the worst-case scenario off the table.”
Read here how the virus has forced some to change their investment calls.
Here are some key events coming up:
German industrial production is due on Friday.The U.S. employment report for January is set for Friday release.Australia’s central bank chief speaks and takes questions at a parliamentary committee.
And these are the main moves in markets:
Futures on the S&P 500 Index rose 0.4% as of 7:07 a.m. in London. The underlying gauge climbed 1.1% on Wednesday.Euro Stoxx 50 contracts were up 0.6%.Japan’s Topix index added 2.1% at the close in Tokyo.Hang Seng Index rose 2.4%.Shanghai Composite Index gained 1.7%.MSCI Asia Pacific Index advanced 1.7%.
The yen was at 109.87 per dollar, little changed.The offshore yuan was little changed at 6.9723 per dollar after rising about 0.3% earlier.The euro bought $1.10, little changed.
The yield on 10-year Treasuries was flat at 1.65%.Australia’s 10-year yield gained six basis points to 1.09%.
West Texas Intermediate crude increased 2% to $51.79 a barrel.Gold was steady at $1,558.51 an ounce.
–With assistance from Christopher Anstey and Joanna Ossinger.
To contact the reporter on this story: Adam Haigh in Sydney at [email protected]
To contact the editor responsible for this story: Christopher Anstey at [email protected]
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