Archives of “March 2020” month

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White House, Democrats reach bipartisan agreement on virus stimulus plan

  
  Analysis
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Touchdown, finally

Touchdown, finallyRisk is pushing higher on the back of the headlines here with S&P 500 futures paring earlier losses while the Nikkei surges higher to over 7% gains. Meanwhile, AUD/USD is back up to above 0.6000 as the market cheers on the news.
Bloomberg is reporting that a deal has been reached with Senate Democrats and Republicans on a $2 trillion stimulus plan to respond to the economic fallout from the virus outbreak, citing two people familiar with the matter.
And according to CQ Now and RollCall reporter, Jennifer Shutt, citing remarks by Eric Ueland in saying that “much of the bill text has been completed and we’ll finish what’s left and be able to circulate it early in the morning”.
So, no details are released yet as negotiators are putting the final touches in place. There are also no details on when Senate will be voting, after which the House needs to vote before getting Trump’s seal of approval thereafter.

Risk is pushing higher on the back of the headlines here with S&P 500 futures paring earlier losses while the Nikkei surges higher to over 7% gains. Meanwhile, AUD/USD is back up to above 0.6000 as the market cheers on the news.

US stocks jump in a monster bounce — Dow gains most since 1933

  
Analysis, US Market
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The Fed and Congress inspire an equity rally

Closing changes:
  • S&P 500 +9.4% — biggest since 2008
  • DJIA +11.3%
  • Nasdaq +8.0%
It was a great day to buy stocks as the market bets that Congress will come through with some kind of stimulus. There was also some major bargain hunting and short-covering. The four best performers on the S&P 500 were: L Brands, American Airlines, MGM Resorts, Norwegian Cruise Lines. Energy was the top-performing sector.
Every bottom starts with a bounce but not every bounce is a bottom. That said, bottoms are built on skepticism so my skepticism is only adding fuel to the fire.
The rally today is slightly bigger than the one that led Trump to email out this:
The Fed and Congress inspire an equity rally

G7: “We will do whatever is necessary” to restore confidence

  
  Analysis
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G7 statement

  • We are taking action and enhancing coordination on domestic and international policy efforts to respond to epidemic
  • We pledge to promote global trade and investment
  • Says they are pushing liquidity support and fiscal expansion
Here is the full text:

Statement of G7 Finance Ministers and Central Bank Governors

Consistent with the direction from G7 Leaders, we are taking action and enhancing coordination on our dynamic domestic and international policy efforts to respond to the global health, economic, and financial impacts associated with the spread of the coronavirus disease 2019 (COVID-19). Collectively, G7 nations have already enacted a wide-ranging set of health, economic, and financial stability measures.  We will do whatever is necessary to restore confidence and economic growth and to protect jobs, businesses, and the resilience of the financial system. We also pledge to promote global trade and investment to underpin prosperity.

Our nations are working together to fight the COVID-19 outbreak and mitigate its impact, treat those affected, and prevent further transmission. G7 finance ministries are helping advance this effort by providing the funding needed to respond to the situation. In particular, we recognize the urgent need to increase support for the rapid development, manufacture, and distribution of diagnostics, therapeutics, and a vaccine for COVID-19. We are providing bilateral and multilateral assistance to strengthen foreign governments’ prevention efforts and their health and emergency response systems.

The G7 is committed to deliver the fiscal effort necessary to help our economies rapidly recover and resume the path towards stronger and more sustainable economic growth. Alongside our nations’ efforts to expand health services, G7 finance ministries are undertaking, and recommend all countries undertake, liquidity support and fiscal expansion to mitigate the negative economic impacts associated with the spread of COVID-19.

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Nikkei 225 closes higher by 7.13% at 18,092.35

  
Analysis, Global Indices

Asian equities rise after Fed launches unlimited QE overnight

Nikkei 24-03

The promise of the Fed backstopping the US economy and Washington said to be closer to a stimulus package agreement is boosting investor hopes in Asian trading today.

The Hang Seng is up by 3.8% while the Shanghai Composite is up by 1.1% on the day, as US futures are keeping over 3% gains for the time being after a bit of a subdued reaction to the events from overnight trading.
But with the dollar easing a little today, it is also helping to give some reprieve to the market in general as risk is faring better to start the session.
This sets up a positive platform for European stocks to build on but the question is, can this stay the course until the end of the day? Things are still far from certain at this stage.
For now, the dollar is keeping weaker across the board with USD/JPY down to 110.32 and EUR/USD sitting just under the 1.0800 handle.

Major US airlines are drafting plans for a potential shutdown of virtually all passenger flights in the US

  
  Analysis

Wall Street Journal reports, citing industry and federal officials:

  • Major U.S. airlines are drafting plans for a potential voluntary shutdown of virtually all passenger flights across the U.S.
  • government agencies also consider ordering such a move
  • amidst the air-traffic control system “ravaged by the coronavirus contagion”
  • No final decisions have been made by the carriers or the White House
Wall Street Journal reports, citing industry and federal officials: 
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