NEW YORK / LONDON (Reuters) – World stock markets soared on Thursday as shares in Netflix and Amazon.com increased, while investors anticipated big gains from the coronavirus-induced slowdown keeping people at home, while bond yields fell as the data reflected the US unemployment record.
ARCHIVE PHOTO: The New York Stock Exchange (NYSE) is seen in the financial district of lower Manhattan during the coronavirus disease outbreak (COVID-19) in New York City, New York, USA, on April 13, 2020. REUTERS / Andrew Kelly
The stock markets saw most of the session, as the dire data on unemployment claims in the United States underscored a deep recession and dampened investor expectations that the economy will soon be back up and running.
A record 22 million Americans sought unemployment benefits last month, with millions more shares in the past week, a strong sign of how deep the economic crisis caused by the pandemic will be.
Morgan Stanley (MS.N) Chief Executive James Gorman told shareholders he “can promise” that the bank will not meet its medium-term financial targets again this quarter, as the blockages will continue to improve the global and US economies.
Morgan Stanley recorded a 32% drop in quarterly earnings and its shares fell 0.3%.
With a “totally clear” place in sight, seven states in the northeastern U.S. extended a closure to contain the pandemic until May 15, even as President Donald Trump prepared to detail his plan to open businesses in the least affected states since May .
The dollar peaked in a week and US Treasury yields fell for the third session, with investors fleeing to assets in havens.
Investors are wondering whether to be optimistic when economies come out of recession or to expect a coronavirus vaccine and that the growth of clear signs has fully recovered, said Anthony Saglimbene, global market strategist at Ameriprise.
“The stock market is forward looking and has discounted many of the really bad economic and earnings figures that we will see in the first and second quarters,” said Saglimbene.
“It’s really about” When we reopen, what is this curve like? Is it a ‘V’, is it a ‘U’ or is it a ‘W’? “Our view is that the recovery will be slow,” he said.
It could take a few years for US economic activity to fully recover from the severe crisis caused by the coronavirus pandemic, said John Williams, president of the Federal Reserve Bank of New York.
The MSCI stock meter worldwide .MIWD00000PUS gained 0.14% and its emerging market share index lost 0.37%.
On Wall Street, stocks won. Dow Jones Industrial Average .DJI rose 33.33 points, or 0.14%, to 23,537.68. The S&P 500 .SPX gained 16.19 points, or 0.58%, to 2,799.55 and the Nasdaq Composite .IXIC added 139.19 points, or 1.66%, to 8,532.36.
European stocks rebounded, with the pan-European index STOXX 600 up 0.58%.
Global benchmark Brent crude has risen, but West Texas Intermediate, the US benchmark index, has stabilized, with official data showing US stocks soaring to the maximum on record. Investors hoped that this increase could mean that producers have few options but to cut production as the coronavirus outbreak destroys demand.
The Organization of Petroleum Exporting Countries expects global demand to contract by 6.9 million barrels per day, or 6.9%, in 2020, it said in a monthly report. Last month, OPEC had expected a small increase of 60,000 bpd in demand.
Brent LCOc1 crude futures rose 13 cents to close at $ 27.82 a barrel. The US WTI CLc1 was stable at $ 19.87 per barrel.
It was speculated that the European Central Bank was seeking to avoid further stress in the region’s debt markets, where debt to GDP is expected to reach 150% this year.
“We had this big wave of big announcements from governments and central banks and now we need to delve into how it all works,” said Gilles Moec, chief economist at AXA Investment Managers.
The 10-year benchmark US Treasury notes US10YT = RR rose 8/32 in price to reduce its yield to 0.6173%.
Policymakers are beginning to allow tight blocks, and companies are trying to restart. Germany proposes to reopen schools and some retailers from 4 May.
Gold fell after rising 1.3%, as demand for shelters weakened after unemployment claims in the U.S. rose less than a week ago and raised hopes for a reduction in restrictions imposed by the coronavirus.
Gold futures in the US GCv1 fell 0.5% to $ 1,731.70 per ounce.
Additional reporting by Tom Westbrook in Singapore and Shadia Nasralla in London; Edited by Bernadette Baum, Jonathan Oatis and Dan Grebler