Stock prices had a bit of a reprieve yesterday as folk digested recent falls and weighed them against some fairly substantial moves being made by central banks and governments.
In the US, the Dow Jones industrial Average, S&P 500 and Nasdaq Composite added between 0.9% and 2.3% on the day. The likes of Tesla, Twitter and Netflix all posted gains of 5% or more.
Bond yields have been bouncing around lately as folk try to work out the value of bonds in the face of ultra-low interest rates and bond-buying by the central bank. Yields are higher than they were last week, but have taken a swinging route to get there.
Meanwhile, investment research resource, Bloomberg, took a mild swipe at Trump saying that he “sought to reassure sceptical Republicans that he’s aiming to help workers through the crisis”. I’m pretty cynical about Trump, but I’m not owned by someone who has just been running for the Democratic nomination for presidential candidate.
Virus cases are still surging across Europe and North America, so I for one am not piling back into the markets just yet.
In the meantime, the Federal Reserve (US central bank) has opened nine new dollar swap lines (quote that to your mother-in-law). This gives countries that need access to dollars a bit of a cash lifeline, and takes pressure off countries that might otherwise be facing a lack of hard currency (dollars, euros, yen) in their own countries. In short, it should help to keep the international financial system running.
Other data are beginning to show the economic effects of measures to slow the contagion of the virus. The number of people filing for unemployment spiked last week as folk are laid off due to shut-downs and tumbling business turnover.
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