Daily summary: Global stock markets rise on stimulus

 

Global equity markets traded higher during another volatile session amid hopes that the huge stimulus packages announced by central banks and governments across the globe would help to provide a quick recovery later this year. During the majority of today’s session the European indices were trading lower, after the ECB recommended to the private banks of the Eurozone not to pay dividends from the fiscal year 2019 and 2020 until at least October 2020, and to not repurchase its own stocks to reward the shareholders amid the coronavirus crisis. Also German government advised listed companies to suspend dividend payments as part of an aid program. However at the end of the day  stocks in Europe managed to erase early losses. DAX gained 1.9%, FTSE 100 went up 0.97 %  and CAC 40 finished 0.62% higher.

 

US indices are trading higher despite disappointing Fed Manufacturers data which dropped to -70, its  new record low. However investors remain nervous as the number of coronavirus infections are increasing sharply on daily  basis. Only in the US,  confirmed cases passed 140,000. The US become new epicentre of the pandemic, therefore President Donald Trump extended the national social distancing guidelines to April 30th, backing off his hopes that the US economy will reopen by Easter. Markets are trying to assess whether the coordinated actions from central banks and governments will be enough to offset the economic impact of the pandemic. S&P is up 2.57 %, Dow Jones advanced 2.25% and NASDAQ went up 2.88%.

 

Brent oil went down more than 10% to trade around $22 per barrel during today’s session, a level last seen in 2002 as Saudi Arabia and Russia are continuing the price war.

The Saudis began a price war at the beginning of March which has led to the biggest price drop in the last 30 years. Saudi Arabia increased production after Russia refused to agree a production cut of 1.5 million barrels per day proposed by OPEC. Oil prices are under strong pressure due to fears that travel restrictions and city lockdowns around the world may last for months, which will adversely affect oil prices.

 

Silver lost 2.38% and gold trades slightly below the flat line.

US consumer confidence is the main macroeconomic release scheduled for tomorrow During Asia session investors will  get to know China’s manufacturing  PMI data and New Zealand’s Business confidence index. Next  GDP data from UK and Spain will be published. Of course, news regarding the spread of coronavirus should have the biggest impact on the markets.