(Bloomberg) -- Stocks rebounded as investors digested a surprise in the U.S. presidential primary and weighed the potential for more of a concerted effort by the world’s largest economies to tackle the fallout from coronavirus. The dollar advanced.
The S&P 500 rallied back from yesterday’s steep declines after Senator Joe Biden won a majority of state primaries on Super Tuesday, dulling some investors concerns about the possibility of a more liberal candidate challenging President Donald Trump in the fall. At the same time, 10-year Treasury yields fell below 1% and the dollar rose as traders awaited other top economies to follow the Federal Reserve’s emergency rate cut. Oil rose for a third day.
Stocks tumbled Tuesday after the Fed’s move wasn’t followed by other Group of Seven nations with rate cuts or fiscal stimulus in the face of the virus’s growing threat to the global economy. Equities advanced on speculation the Bank of England would soon cut and Europe would take action.
Part of the rebound also came from Biden’s surprise win, particularly in corners of the market most sensitive to the race’s outcome. Managed-care providers, threatened by Senator Bernie Sanders’ “Medicare for All” platform, surged, with UnitedHealth Group Inc. and Anthem Inc. each gaining more than 12%.
“The major theme is central banks are aggressively easing now and trying to offset any potential demand shock from coronavirus,” said Dennis Debusschere, head of portfolio strategy at Evercore ISI, in a phone interview. “It’s clear from talking with investors that Bernie Sanders was a negative tail risk so you have some improvement in the outlook as it relates to removing that tail risk.”
Investors are anxious for promised action by the Group of Seven to confront the virus while they’re buying risk assets on dips and watching the world’s biggest bond market move closer to negative yields. The Democratic contest posed a fresh challenge to President Donald Trump as nine states went to Biden, who’s positioned as a moderate against a more progressive Sanders in the race for the party’s nomination to take on Trump in November.
These are the main moves in markets:
Stocks
The S&P 500 Index advanced 1.6% as of 9:48 a.m. New York time.The Stoxx Europe 600 Index rose 1%.The U.K.’s FTSE 100 Index added 1%.The MSCI Asia Pacific Index climbed 0.4%.
Currencies
The Bloomberg Dollar Spot Index increased 0.2%.The euro decreased 0.6%.The British pound rose 0.1%.The Japanese yen weakened 0.2%.
Bonds
The yield on 10-year Treasuries fell three basis points to 0.97%.The yield on two-year Treasuries fell seven basis points to 0.63%.Germany’s 10-year yield fell one basis point to -0.63%.
Commodities
West Texas Intermediate crude jumped 2.1% to $48.16 a barrel.Gold fell 0.2% to $1,641.80 an ounce.
--With assistance from Elena Popina, Katherine Greifeld and Claire Ballentine.
To contact the reporters on this story: Todd White in Madrid at twhite2@bloomberg.net;Randall Jensen in New York at rjensen18@bloomberg.net
To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Robert Brand
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2020-03-04 14:32:00Z
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