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N.A. Markets Gain Ground on Optimism That Pandemic Could Be Slowing

Market Watch – April 9, 2020

April 9, 2020

It was a strong start to the week as markets rallied Monday on early signs that lockdowns in the U.S. and Europe may be helping slow the coronavirus pandemic, even as the death toll in the U.S. climbs. All three U.S. markets were up roughly 7% in response to a drop in the daily death toll in New York, one of the country’s worst hotspots. By Monday’s close, the Dow was up 1,627 points, while the TSX gained more than 650. However, oil markets struggled to stabilize Monday after an emergency summit to cut global production was pushed back from Monday over continued tensions between the Saudis and Russians.

It was an extremely volatile day for trading in U.S. markets Tuesday, which saw dramatic gains in the morning erased by the day’s close. The market’s gains vanished partly in response to tumbling U.S. crude prices, which fell more than 9%.

Although the Dow was up by more than 900 points in early trading, it closed down 26 points, while the S&P and Nasdaq lost 0.2% and 0.3%, respectively. The TSX ended the day with a slight gain of 0.1%.

Also weighing on markets were warnings about the depth and severity of the U.S. recession. In an interview this week, former Fed Chair Janet Yellen predicted the U.S. economy would decline by at least 30% in Q2.

N.A. stocks rose once again Wednesday, buoyed by new data that the spread of the coronavirus could be waning in U.S. and European hotspots. Investor sentiment has also turned positive over news that Fed measures are helping stabilize markets. In addition to slashing interest rates, the Fed took aggressive action in March, pledging to buy government bonds, corporate-bond funds and municipal debt. This week Fed officials are also expected to provide an additional $2.3 trillion in aid for small and midsize businesses, as well as cities and states.

By Wednesday’s close, the Dow was up 773 points, while the TSX added 312. The TSX’s energy sector jumped more than 4% as oil prices strengthened on hopes that OPEC and its allies will agree to cut production at a summit scheduled for Thursday.

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