US stock markets rally as number of new coronavirus cases appears to fall
Wall Street opened higher on Tuesday, building on the previous day’s gains, as investors hope the slowing growth of the Covid-19 pandemic will speed up the process of restarting the global economy.
The Dow Jones Industrial Average jumped 800 points from the opening bell, while the S&P 500 and the Nasdaq Composite are both gaining around three percent. Stocks in Europe and Asia also surged earlier in the day on hopes that the rapid spread of coronavirus may be easing in some of the places that have been hit hardest.
“Investors chose to accentuate the positives, as they have been mostly doing since the bear-market low,” Ed Yardeni, president and chief investment strategist at Yardeni Research, said in a note to clients seen by CNBC. “In our opinion, we are in the midst of a great rebalancing away from bonds and into stocks.”
He added that “the bear market has most likely discounted a depression-like recession packed into Q2 and Q3.”
The strategist said: “It certainly hasn’t discounted the possibility of an actual apocalyptic depression lasting through at least 2021 and beyond. On the contrary, the market’s recent action suggests that investors are betting on an economic recovery starting during Q4 and continuing through 2021.”
The death toll in some of the world’s coronavirus hotspots, including Spain and Italy, has showed signs of slowing. In the US, the number of new cases appears to have fallen in recent days from its recent peak. The country has over 368,000 infected as of Tuesday.
The US surgeon general said that this week is going to be the “hardest and saddest” for Americans as the coronavirus outbreak continues to ravage the country.
JPMorgan Chase CEO Jamie Dimon said in his annual shareholder letter on Monday that he expects a “bad recession” because of the impact that coronavirus will have on the economy.
Italy and Spain, two of the hardest-hit countries by Covid-19, are also seeing new cases fall off. South Korea reported on Tuesday less than 50 new cases of infection for the second day running. China posted no new deaths as of April 6, for the first time since January, when it started publishing daily updates.
The total number of coronavirus infected worldwide is over 1,363,000, while more than 76,000 people have died.
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