⏳ Final hours! Save up to 60% OFF InvestingProCLAIM SALE

GLOBAL MARKETS-Stocks rally as Biden surge offsets coronavirus fears

Published 05/03/2020, 03:40 am
Updated 05/03/2020, 03:42 am
© Reuters.  GLOBAL MARKETS-Stocks rally as Biden surge offsets coronavirus fears
EUR/USD
-
USD/JPY
-
USD/CHF
-
US500
-
DJI
-
GE
-
DX
-
IXIC
-
DE10YT=RR
-
US10YT=X
-
KS11
-
STOXX
-
MIWD00000PUS
-

(Adds U.S. market open, byline, dateline; previous LONDON)

* Wall Street rallies as Biden becomes front runner

* U.S. Treasury yields near record lows

* Euro STOXX 600 gains 1.0%

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

By Matt Scuffham

NEW YORK, March 4 (Reuters) - The dollar and world equity markets rose on Wednesday as investors were cheered by a strong showing by Joe Biden in the U.S. Democratic presidential primaries, though an economy-weakening coronavirus outbreak kept investors on tenterhooks, with bond yields falling.

Former Vice President Biden, considered less likely to raise taxes and impose new regulations than rival Bernie Sanders, rolled to victories across the South, Midwest and New England on the biggest day of voting in the Democratic presidential nomination campaign. helped U.S. stock markets bounce back from declines on Tuesday after investors deemed the U.S. Federal Reserve's surprise 50-basis-point interest rate cut to be an inadequate response to an epidemic that has so far killed more than 3,000 people worldwide and threatens to slow global growth.

Bonds held on to gains after Tuesday's rate cut.

The Fed's first off-schedule move since the 2008 financial crisis came with comments highlighting both the scale of the challenge and the limits of monetary policy but Biden's success offered investors some respite. Biden emerge as the frontrunner sets the stage for a runoff in the autumn that pits two people who are not anti-business," said Larry Hatheway, co-founder of research firm Jackson Hole Economics, referring to President Donald Trump.

"The concern with Sanders would have been the regulation of large swathes of American industry," he said.

The bounce offered investors the opportunity to rejig portfolios to adapt to current market conditions while markets are higher, Hatheway said, adding that he expects it will only provide temporary respite.

"I don't think the market has bottomed. I think the market will probably fall another 5% to 10%," he said. "We're going to have to go lower because you've got a clear slowdown in activity that's probably going to last through the first half."

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 1.01% and emerging market stocks rose 0.73%.

The pan-European STOXX 600 index .STOXX rose 1.00%, and Wall Street strode higher.

The Dow Jones Industrial Average .DJI rose 471.67 points, or 1.82%, to 26,389.08. The S&P 500 .SPX gained 45.24 points, or 1.51%, to 3,048.61 and the Nasdaq Composite .IXIC added 120.03 points, or 1.38%, to 8,804.12.

The Euro STOXX 600 .STOXX gained 1.0%, on course for a third straight days of gains.

The spread of the virus continued to impact companies and financial institutions around the world. Lufthansa said it would ground 150 aircraft out if its total fleet of around 770 due to the virus and General Electric (NYSE:GE) warned it would take a hit of $300 million to $500 million. equity firm Blackstone's Chief Executive Stephen Schwarzman said it "remained unclear" if the Fed's cut would restore confidence. saw the Fed's extraordinary move as a decision to move hard and early because it expected further economic damage from the spread of the coronavirus.

"They have signaled willingness to take further action, which is why we are seeing a further rally in bonds," said Tim Drayson, head of economics at Legal & General Investment management.

The benchmark 10-year U.S. Treasuries yield US10YT=RR , which falls when prices rise, held below 1% - not far over the overnight low of 0.9060%. The yield has fallen for ten straight days, its longest slide in at least a generation.

Benchmark 10-year notes US10YT=RR last rose 17/32 in price to yield 0.9618%.

Euro zone bond yields also held near record lows on Wednesday, with Germany's benchmark 10-year Bund yield DE10YT=RR around -0.64%, near six-month lows set on Monday.

With safe-haven currencies in demand, the dollar clawed back some ground from near five-month lows versus the yen JPY=EBS and fell to its lowest against the Swiss franc CHF=EBS in almost two years. It was flat against a basket of six major currencies =USD .

The dollar index =USD rose 0.332%, with the euro EUR= down 0.36% to $1.1131.

The Japanese yen weakened 0.20% versus the greenback at 107.37 per dollar.

Korean stocks .KS11 gained 2% on a $9.8 billion government stimulus package to mitigate the coronavirus impact. Coronavirus hits financial markets

https://tmsnrt.rs/2TI8YnE

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.