Stock Markets Surge Higher as Stimulus Efforts Pay Off
The Dow Jones Industrial (30 top US companies) put in its best performance since 1933 yesterday. It rose 11%, along with many other global indices (FTSE 10%+), as investors begin to respond to government and central bank stimulus efforts.
Overnight, US congress passed a $2-trillion stimulus package which will help both businesses and individuals survive what is likely to be a sharp and possibly prolonged economic downturn. This latest action from the US government, mixed with the Fed’s move on Monday, certainly makes one question what they collectively have left in the tank. Even though they would have everyone believe their respective arsenals are still full, it’s becoming clear they are reaching the limit of their abilities. For now, markets remain content, however, as we’ve already seen many times before in the current saga, this could change quickly.
Yesterday’s PMI numbers were shocking across the board. From the eurozone, to the UK and over to the US, the data truly displayed a collapse in activity. While the manufacturing numbers were not so bad, service figures were painful, to say the least. The next few months will be testing for everyone, hopefully, measures taken by central banks and governments will cap the economic downside.
The calendar is once again eventful today. There’s something from each major region in the west. The UK sees its latest inflation print, while Germany sees an IFO business sentiment gauge at 0900. From the US today, durable goods orders are scheduled for release at 1230.
8:30am, March 25th 2020
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9:28am, May 15th 2020
Sterling Looking Vulnerable As Week Draws to a Close