Thursday 13th February 2020
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U.S. equities rose to records, tracking European and Asian stocks higher, as optimism grew that the global economy can recover from the impact of the coronavirus amid signs the spread of the illness is slowing. Crude rallied and Treasuries fell.
All three major American gauges opened firmer, with the S&P 500 Index and Dow Jones Industrials hitting all-time highs, after China’s Hubei province reported the lowest number of new virus cases this month and suspected infections on the mainland declined.
“The virus is an uncertainty, but it seems to be more of a manageable uncertainty and I think that’s the way that the market is looking at it,” said Chuck Cumello, chief executive officer of Essex Financial Services, which has about $2.8 billion in assets under management.
Carmakers and banks led the advance in the Stoxx Europe 600 Index, even as data showed a deep slump in euro-area industrial output at the end of last year. Asia saw gains for most equity benchmarks, with those in Shanghai and Hong Kong outperforming.
Oil climbed above $51 a barrel in New York, holding that advance even after OPEC slashed forecasts for global demand and U.S. inventories came in higher than estimated. Raw materials including copper and iron ore gained, while core European bonds tracked Treasuries lower and the yen and gold also slipped. New Zealand’s dollar jumped the most in about two months after its central bank said the impact from the virus will be short-lived and it doesn’t project a need for rate cuts this year.
Confidence is increasing among some investors that the impact of the coronavirus outbreak will ultimately prove short-lived. President Xi Jinping vowed China would meet its economic goals while winning the battle against the virus that has now claimed 1,115 lives, while Federal Reserve Chairman Jerome Powell said on Tuesday the central bank is keeping a close eye on fallout from the epidemic.
Meanwhile, peripheral European bonds bucked declines and the yield on 10-year Greek debt dropped below 1% for the first time.
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