U.S. stocks erased losses after economic data topped estimates, as investors debate whether the market meltdown has ended given the continued spread of the coronavirus. Treasuries and the dollar rose.The S&P 500 turned higher after a consumer confidence measure and a regional manufacturing reading fell less than expected. Stock Market: U.S. Stocks Turn Higher.
Still, the benchmark for American equities is down more than 18% this year as measures to combat the pandemic shutter large parts of the economy. Unprecedented government spending and monetary stimulus lifted stocks from a rout that reached 33%, but the hit to GDP is shaping up to be monumental, with Goldman Sachs now forecasting a 34% contraction in the second quarter before a sharp rebound. Stock Market: U.S. Stocks Turn Higher.
As March ends, financial markets that have been upended since the virus first made headlines in January are showing signs of calming. Still, the quarter delivered astounding superlatives:The record bull market in U.S. stocks turned into a bear market on March 12, 11 years and three days after the last one ended.Bloomberg’s dollar index surged 6%, most since 2016, even after tumbling more than 3% since March 23.
The Cboe Volatility Index averaged 57.1 in March, triple the mean in the prior decade.European shares plunged more than 20% for the worst three months since 1987. Spain lost 30%.West Texas Intermediate lost 65%, the worst quarter on record.The 10-year Treasury yield hit 1.94% on Jan. 20. It fell to 0.31% by March 9 and is just over 0.7% now.Gold topped $1,700 in early March before plunging $200 an ounce.
It’s on track for a sixth quarterly gain.China’s Shanghai Composite lost 10%, while Tokyo’s Topix fell almost 20% in its worst three months since 2008.Copper fell 23% and nickel lost 19%, both most since 2011.The pound fell more than 6%, while the yen was virtually flat versus the dollar.
South Africa’s rand had its worst quarter since 2001 and Mexico’s peso fell the most since 1995.On Tuesday, investors focused on signs that Congress could deliver a fourth round of stimulus as the virus spreads deeper in the country. Treasuries edged higher, while the dollar rose and crude pushed back above $22 a barrel.
Investors are at a crossroads, questioning whether extraordinary stimulus by countries and central banks can counter further retrenchment of firms and consumers as the outbreak spreads.New York City, which is emerging as the new epicenter of the pandemic, reported a 16% increase in deaths in six hours. Italy and the Netherlands are considering extending lockdowns, and Spain’s 849 deaths were the most in one day for the country. Stock Market: U.S. Stocks Turn Higher.
“We just don’t know how long the lockdown or stasis of the world economy is going to be,” said Toby Lawson, head of global markets at Societe Generale Securities Australia, told Bloomberg TV. “It would be very premature to say that we’ve seen the bottom.”In Europe, the Stoxx 600 rose and a measure of corporate-credit stress eased. Equities were mixed in Asia, where China had stronger-than-anticipated manufacturing data.
The dollar rose versus the euro and three other major peers. The yen sank as the end of Japan’s fiscal year brought positioning adjustments. The ruling party proposed the country’s biggest-ever stimulus package worth 60 trillion yen ($554 billion).In China, the official purchasing managers’ index rose to 52.0 this month. That’s up from a record low of 35.7 in February and above the 50 mark which signals improving conditions.
Still, China’s bureau of statistics cautioned that the single-month data didn’t necessarily mean that economy has returned to normal level amid continuing coronavirus concerns.These are the main moves in markets:StocksThe S&P 500 Index rose 0.1% as of 10:17 a.m. New York time.The Stoxx Europe 600 Index rose 1%.The MSCI Asia Pacific Index decreased 0.3%.CurrenciesThe Bloomberg Dollar Spot Index increased 0.3%.The euro declined 0.9% to $1.0954.
The British pound fell 0.4% to $1.2366.The Japanese yen dipped 0.7% to 108.50 per dollar. Bonds The yield on 10-year Treasuries declined three basis points to 0.70%.Germany’s 10-year yield climbed less than one basis point to -0.49%.Britain’s 10-year yield was unchanged at 0.336%.
CommoditiesGold sank 1.1% to $1,605.32 an ounce.West Texas Intermediate crude increased 4.4% to $20.97 a barrel. Stock Market: U.S. Stocks Turn Higher
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