What’s happening: US stocks closed sharply higher on Monday, with all three major indices surging more than 7%.
What happened: Investors rejoiced at the first positive sign of America’s ability to contain the coronavirus pandemic. A decline in the daily death numbers in the nation’s worst affected state, New York, reignited hopes of the outbreak not being as prolonged as feared. A slowdown in death tolls was also reported in some of the other major COVID-19 hotspots around the world.
However, US officials still cautioned against complacency and have warned the nation, with numbers of deceased exceeding 10,000. With a strong rise in the stocks yesterday, let’s see how the markets are expected to perform today.
Why it matters: Monday’s surge in indices marked their strongest single-day percentage rise since March 24. After finishing 1.7% lower on Friday, the Dow made a strong comeback yesterday. Positive investor sentiment, driven by news of coronavirus easing in New York, sent the Dow higher by 7.7%. New York, which reported the largest number of cases in the country, recorded its first drop in deaths.
New York Governor Andrew Cuomo expressed optimism around the cases nearing a peak level, with the daily death toll falling under 600 for two consecutive days, suggesting a “possible flattening of the curve."
Experts cautioned, however, that it is still unclear whether this trend will hold. The coronavirus pandemic has infected over 368,400 people in the US and claimed around 10,900 lives, half of which are in New York state alone. The total COVID-19 cases have exceeded 1,348,600 globally, with around 74,800 fatalities.
Meanwhile, Governor Cuomo increased the civil penalty twofold to $1,000 for not following the social-distancing guidelines and delayed the opening of all schools until April 29.
The Dow jumped 1,627 points to close at 22,679.99 on Monday, led by a surge of around 18% in Boeing’s stock. The S&P 500 climbed 7% to finish at 2,663.68, while the Nasdaq 100 gained 7.3% to end at 7,913.24.
Shares of Carnival spiked 20% after the Saudi Arabian fund, The Public Investment Fund, announced the acquisition of an 8.2% stake in the cruise company. Wayfair’s shares jumped over 40% after the retailer disclosed a surge in its business following the coronavirus outbreak.
In other news, yield on the 10-year US Treasury note rose 8.8 basis points to 0.675%, while WTI crude for May delivery fell 8% to settle at $26.08 per barrel.
What to watch: Investors are hoping for a marked downward trend in coronavirus cases and deaths. US stocks are expected to remain in positive territory today, with stock futures pointing towards a higher open. Investors also await a couple of economic reports from the country, including job openings and the IBD/TIPP Economic Optimism Index.