BANGKOK – Shares advanced in Asia on Wednesday after the Dow Jones Industrial Average surged to its best day since 1933 as Congress and the White House neared a deal on injecting nearly $2 trillion of aid into an economy ravaged by the coronavirus.
Japan’s Nikkei 225 index jumped 5.3%, while Hong Kong added 3% and Sydney climbed 3.6%. Markets across Asia were all up more than 2%.
Tokyo share prices were boosted by the decision to postpone the 2020 Olympics to July 2021 in view of the coronavirus pandemic, which has brought travel almost to a standstill and is leaving many millions of people ordered to stay home to help contain the outbreaks.
U.S. futures edged lower, however, raising uncertainty over what the day may bring. The future for the Dow down 1.1% at 20,387.00 and the contract for the S&P 500 falling 1.6% to 2,399.80.
That followed a stunning 11.4% surge in the Dow overnight. The more closely followed S&P 500 index leaped 9.4% as a wave of buying around the world interrupted what has been a brutal month of nearly nonstop selling.
Economists and investors expect to see some dire measures of the impact of the virus in coming days and weeks, and few believe markets have hit bottom. Rallies nearly as big as this have punctuated the last few weeks, and none lasted more than a day.
A breakthrough in the U.S. Congress on the stimulus package would be another welcome boost to sentiment. Both Democrats and Republicans said Tuesday they were close to agreeing on a massive economic rescue package, which will include payments to U.S. households and aid for small businesses and the travel industry, among other things. A vote in the Senate could come Wednesday.
Now that the Federal Reserve has done nearly all it can to sustain markets, pressure is on Congress to act. Ultimately, investors say they need to see the number of new infections peak before markets can find a floor. The increasing spread is forcing companies to park airplanes, shut hotels and close restaurants to dine-in customers.
“It’s sort of like, keep the patient alive in the emergency room so you can provide some treatment options,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management.
The Dow rose 2,112.98 points, its biggest point gain in history, to 20,704.91. The S&P 500, which is much more important to most 401(k) accounts, rose 209.93, or 9.4%, to 2,447.33 for its third-biggest percentage gain since World War II. The Nasdaq composite jumped 557.18 points, or 8.1%, to 7,417.86.
By midday Wednesday in Asia, Tokyo’s Nikkei was at 19,044.59, while the Hang Seng rose to 23,120.83. South Korea’s Kospi gained 4.2% to 1,677.91 and the S&P/ASX 200 picked up 2% to 4,830.60. Taiwan’s benchmark jumped 4.3%. Shares were also higher in Southeast Asia.
U.S. crude oil gained 77 cents to $24.78 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international pricing standard, added 73 cents to $30.47 per barrel.
In currency trading, the U.S. dollar was at 111.00 Japanese yen, down from 111.22 yen late Tuesday. The euro rose to $1.0815 from $1.0790.
Earlier share rebounds have evaporated. Since stocks began selling off on Feb. 20, the S&P 500 has had six days where it’s risen, and all but one of them were big gains of more than 4%. Afterward, stocks fell an average of 5% the next day.
The VIX index, a proxy for equity market volatility, remains relatively high, “suggesting that underlying risk sentiment may stay cautious as investors remain wary on the pace of the infection spread, with total confirmed Covid-19 cases exceeding 400,000 globally,” Mizuho Bank said in a commentary.
President Donald Trump said Tuesday during a Fox News virtual town hall that he hopes to “open up ” the economy by Easter. Analysts said the pronouncement wasn’t a contributor to the day’s huge rally, which was mostly due to the stimulus hopes.
“Given the enormity of the package, it will most certainly be well initially well-received as it should be sufficient to avoid buttress ‘Main street’ from falling into worst-case, depression type scenarios, especially with the Fed prepared to monetize all the US government’s debt,” Stephen Innes of AxiCorp. said in a commentary.
For most people, the coronavirus causes only mild or moderate symptoms, such as fever and cough. Those with mild illness recover in about two weeks. Severe illness including pneumonia can occur, especially in the elderly and people with existing health problems. Recovery could take six weeks in such cases.
Governments and central banks in other countries around the world are unveiling unprecedented levels of support for their economies in an attempt to limit the scale of the upcoming virus-related slump.
Germany, a bastion of budgetary discipline, also approved a big fiscal boost. Thailand announced $3.6 billion in stimulus on Tuesday as its prime minister announced a state of emergency likely to bring stronger restrictions on business and travel.
Measures of the shock to the world economy from the pandemic are just beginning to show the extent of its toll on business and livelihoods. In the United States, a preliminary reading on business activity in March showed the steepest contraction on record, going back to 2009. Reports were also gloomy for Europe.
On Thursday, economists expect a report to show the number of Americans applying for jobless claims easily set a record last week. Some say the number could be way beyond 1 million, amid a wave of layoffs, topping the prior record of 695,000 set in 1982.
Oil prices climb before OPEC+ talks, Asian shares falter – Aljazeera.com
Oil prices climbed on Thursday, hours before the world’s largest oil producers are scheduled to meet to discuss output cuts as the coronavirus pandemic ravages demand.
Brent crude futures rose 2.5 percent or 81 cents to $33.65 as of 00:34 GMT after touching a high of $33.90, adding to gains in the previous session.
United States crude futures were up 4.3 percent, or $1.08, at $26.17, having climbed as much as 6 percent the day before.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, are set to convene a video conference meeting on Thursday.
The meeting is expected to be more successful than their gathering in March, where they failed to agree to extend supply cuts and triggered a price war between Saudi Arabia and Russia.
Hopes of an agreement to cut between 10 million and 15 million barrels per day (bpd) rose after media reports suggested Russia was ready to reduce its output by 1.6 million bpd and Algeria’s energy minister said he expected a “fruitful” meeting.
“I think there’ll be a deal, which will bring a bit of cheer in the short run. Then everyone’s attention will refocus on the fundamentals. The fundamentals are appalling,” Lachlan Shaw, head of commodity research at National Australia Bank told Reuters news agency.
Global demand for oil has shrunk significantly as the coronavirus outbreak triggered travel restrictions and temporary business closures. In India, the world’s third-biggest consumer, oil demand has collapsed as much as 70 percent, according to officials at the country’s refiners.
In contrast to oil prices, Asian shares were mixed on Thursday after a three-day rally, with investors mulling the spread of the coronavirus and when economies will be able to ramp up again.
Shares in Tokyo dipped with the Nikkei declining 0.23 percent in early trade, but were higher in Sydney and Seoul. Australia’s S&P/ASX 200 was up 1.51 percent and South Korea’s Kospi gained 1.3 percent.
In China, blue chips declined 0.47 percent while the broader Shanghai Composite Index fell 0.19 percent. Hong Kong’s Hang Seng Index was also in the red, down 1.17 percent.
US S&P 500 Index futures edged up after the gauge jumped 3.4 percent on Wednesday as Joe Biden emerged as the Democratic frontrunner in the US presidential race, bringing its rise from the March low to more than 20 percent.
But investors are still looking at numbers of new coronavirus cases and deaths for clues on where the global economy is headed.
“It’s all a question of when the economy reopens and how quickly that happens,” Nancy Davis, a chief investment officer with Quadratic Capital Management LLC told Bloomberg. “We aren’t out of the woods.”
While the White House’s top health advisers are developing medical criteria for safely reopening the US economy in coming weeks should these trends hold steady, the coronavirus killed a record number of victims in the United Kingdom and Belgium, as well as in the hard-hit states of New York and New Jersey. The number of new cases in Italy and Spain crept up after several days of declines.
WestJet to rehire nearly 6,400 workers with help of federal wage subsidy – CBC.ca
WestJet says 6,400 workers will be brought back onto its payroll once the federal government has approved an emergency wage subsidy program.
In a statement Wednesday night, WestJet CEO Ed Sims cautioned that there might not be enough work for the rehired employees, but noted “it does help them make ends meet.
“We will be communicating with those WestJetters who are affected by this decision as soon as we can,” said Sims.
Last month, WestJet announced it was cutting roughly half of its 14,000 employees with the elimination of 6,900 positions.
Canada’s airline industry has seen a dramatic reduction in demand due to lockdowns to control the spread of the coronavirus that causes COVID-19.
The Calgary-based airline’s move to rehire its employees follows a similar move by Air Canada, which announced Wednesday that it would rehire 16,500 laid-off workers with assistance from the same federal wage subsidy program.
The federal government’s emergency wage subsidy — originally targeted only at small- and medium-sized businesses — was expanded earlier in April to cover a 75-per-cent wage subsidy for Canadian companies that had lost 30 per cent of revenue due to the pandemic.
WestJet said it can’t guarantee that all employees will be coming back to work in the short-term, but the new subsidy will help out.
After announcing layoffs in late March, WestJet executives took a 50-per-cent pay cut and vice-presidents and directors took a 25-per-cent cut.
The airline also said it would reduce the number of flights offered in Canada by about half due to a reduced demand for travel.
Oil Prices Surge with Production Cut Anticipation By – Investing.com
By Gina Lee
Investing.com – Oil prices built on the momentum from the previous session as the price war between Russia and Saudi Arabia seems to be nearing a truce.
Russia said overnight that it was willing to reduce output by around 1.6 barrels daily, or 15%. The announcement saw WTI futures surging to almost 12% as the session closed.
International rose 2.62% to $33.7 by 10:19 PM ET (3:19 AM GMT) and U.S. jumped 3.71% to $26.02.
As the oil industry continues to grapple with a supply glut, with the COVID-19 pandemic shrinking demand, Russia’s declaration comes at an opportune time. The Energy Information Administration (EIA) said overnight that the U.S. crude oil inventory increased by 15.2 million barrels for the week ending April 3, against analyst expectations of a 9.37-million-barrel build.
The American Petroleum Institute (API) also estimated a build of 11.9 million barrels yesterday.
Investors are waiting to see if Russia will hold to its word at OPEC+’s virtual meeting later in the day.
“The coming extraordinary producing-countries meeting is the only hope in the horizon for the market that could prevent a total price collapse and production shut-ins,” Rystad Energy’s head of oil markets Bjornar Tonhaugen told CNBC.
“At the moment, prices are so volatile that any news or leaks about the direction of the negotiations could move them [prices] either way. As you have seen in recent days, price swings from gains to losses and back are not unusual in such times,” he added.
But some investors took a more skeptical view.
“OPEC+ is trying mightily to cobble together a sizable production cut, and they are in full spin mode to try and rally prices,” Again Capital’s John Kilduff told CNBC.
“[OPEC’s meeting] will be a make-or-break moment for the oil market. The math on a 10 million barrel per day cutback, which is the minimum necessary to stabilize the situation, is almost impossible to compute. I expect a bad day for OPEC+ tomorrow,” he added.
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