U.S. stocks rose after a mixed overnight session, as investors saw glimmers of optimism in health-care efforts to deliver rapid virus testing. The dollar rose.
The S&P 500 Index climbed for the fourth time in five days even after a weekend full of negative pandemic news, including President Donald Trump’s abrupt order to extend recommendations aimed at inhibiting the spread. Health-care shares were among the biggest gainers as Abbott Laboratories surged after unveiling a five-minute coronavirus test and Johnson & Johnson announced a vaccine candidate for the virus.
Crude fell 5 per cent after briefly paring losses when Trump said he plans to speak with Russia’s Vladimir Putin about crude. Shares in Europe were mixed after declines across much of Asia. The dollar was on course to snap a four-session losing streak.
Canada’s main stock index opened lower on Monday. At 9:35 a.m. ET (1335 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 40.7 points, or 0.32 per cent, at 12,647.04.
Core European bonds rose after the outbreak killed more than 3,000 in Spain and Italy over the weekend. Pessimism returned to credit markets, where the cost to insure high-yield debt jumped in both Asia and Europe, as Moscow and Tokyo joined other cities urging residents to remain at home. Brent crude extended recent losses and was set for its worst month in history, down about 54 per cent. Gold and silver both dipped.
Investors are beginning the week hearing that the biggest economy will stay crippled for longer after Trump heeded advice from the government’s top doctors that re-opening the U.S. in two weeks risks greater loss of life as the coronavirus outbreak accelerates. The president said in a news conference “social distancing” guidelines would remain until at least April 30, while his top infectious-disease expert said 100,000 to 200,000 may die.
“Markets are still in uncharted territory,” said Medha Samant, director of investment at Fidelity International. “When you look at the stages of this pandemic, you’ve gone into escalation,” she said. “The epicenter has shifted to the U.S.”
In the latest stimulus moves, China’s central bank lowered short-term funding rates and injected cash into its financial system, Australia announced a job-support program and limited public gatherings to just two people, while Singapore unveiled an unprecedented easing in policy.
“The assumption that we can turn a switch in a month or two and everything is going to be OK is a faulty opinion,” David Kotok, chief investment officer at Cumberland Advisors Inc., told Bloomberg TV. “We are waiting to see the closer timetable of treatment, testing, and vaccine — that’s very important to us.”
Elsewhere, Australian shares were the notable exception to broad declines, with the equity benchmark surging by a record thanks to the new stimulus measures. Emerging currencies including South Africa’s rand and Mexico’s peso tumbled amid concern about debt downgrades.
Quarter-end strains could add to investor nervousness on Monday and Tuesday as financial firms rein in collateral lending to shore up balance sheets, while Japanese banks face their fiscal year-end. The MSCI gauge of global equities is down about 23 per cent since the start of the year, on course for its worst quarter since the end of 2008.
