Stocks rise as reopening, easing China-US tensions trump bad data

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By MG News | May 08, 2020 at 09:30 AM GMT+05:00

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May 08, 2020: Moves to ease lockdown measures and reopen economies around the world fired equity markets Friday as investors looked past a string of depressing data suggesting the planet is heading for its worst downturn since the Great Depression.

Some of the world's biggest economies are in contraction, factory production has collapsed, hundreds of millions of jobs have been destroyed and numerous companies have gone to the wall since the pandemic struck earlier in the year.

And some observers are warning of more pain to come.

But traders remain buoyed, as mind-boggling stimulus and central bank backstopping measures along with easing China US-tensions have provided much-needed reassurance.

That combined with signs of a slowdown in the disease in some of the worst-hit nations and governments slowly lifting restrictions that have kept around half planet under some form of lockdown has fuelled a surge across world markets.

After crashing in the space of a few weeks, global equities are up about 20 percent since their trough in March, and analysts say the gains could continue.

JP Morgan Chase analysts wrote in a note: "While the collapse in economic activity is historic, so too is the global policy response to cushion the impact and support a recovery.

"We expect risky assets to continue to recover as economies reopen." They did, however, expect gains to slow down.

Wall Street's three main indexes all rallied more than one percent, with the Nasdaq even running into positive territory for 2020, despite data showing new claims for US unemployment benefits hit 3.2 million last week, taking the total to 33.5 million.

 

AFP/APP

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USD RBD PALM OLEIN 998.50 998.50
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