Dow surges over 1000 points on investor optimism as coronavirus fatalities slow in Europe & New York
US stock markets are surging higher on Monday following news that the death rate from Covid-19 in New York State and the worst-hit European countries is declining.
The Dow Jones Industrial Average has gained over five percent after the opening bell. The S&P 500 and the Nasdaq Composite are trading over four percent higher.
Australia’s S&P/ASX 200 and Japan’s Nikkei 225 gained more than four percent to start the week, while Hong Kong’s Hang Seng Index grew 2.2 percent. Markets in mainland China were closed for a public holiday.
Stocks have also rallied in Europe, with Germany’s DAX leading the region, rising more than four percent.
The White House acknowledged that this week could be among the toughest for coronavirus hotspots like New York. However, President Donald Trump said on Sunday he was hopeful the country could be seeing a “leveling-off” of the coronavirus crisis in some of worst-affected regions.
“We see light at the end of the tunnel. Things are happening,” Trump said, warning that still, the US would reach “a horrific point” in terms of deaths.
New York State reported 594 new coronavirus deaths on Sunday, fewer than the 630 recorded on Saturday, marking the first daily decline in coronavirus-related deaths, according to Governor Andrew Cuomo.
“Incoming data suggests New York State might peak sooner than Cuomo’s optimistic case,” Tom Lee, head of research at Fundstrat, said in a note to clients seen by CNBC. “With better visibility on the healthcare crisis in the US, particularly, on a potential to model a national peak, we believe buyers are now taking control.”
Slowing death rates in Europe gave some hope that the US may also be nearing its peak, and that the stay-at-home strategy is working.
Italy, which was the epicenter of Europe’s pandemic before Spain overtook it in terms of the number of coronavirus cases, reported its lowest daily death toll for more than two weeks on Sunday. Germany also reported a slowdown in the rate of new cases on Sunday for the third day in a row. In Spain, the rate of new infections and deaths continued to decline. The country’s rise in the number of deaths on Sunday represented a six percent decrease in total deaths, about half the rate reported a week ago.
“The data from this week and today confirms the slowing down of infections,” Spain’s Health Minister Salvador Illa told a news conference on Sunday, according to Reuters. “The data confirms that confinement is working.”
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