Wall Street leads global stocks up on US$2t stimulus; dollar takes a hit

Federal Reserve Chair Jerome Powell said the US economy is likely in recession already but that reopening businesses should be dictated by the control of the virus’ spread. — Reuters pic

NEW YORK, March 27 — A Wall Street rally powered global gains in stocks yesterday despite a record number of new unemployment filings in the United States, as traders focused on the unanimous passage of a US$2 trillion (RM8.72 trillion) coronavirus relief bill in the US Senate and the possibility of more stimulus to come.

The legislation is intended to flood the country with cash in a bid to stem the crushing impact the outbreak has already had on the world’s largest economy. Nearly 3.3 million Americans filed for unemployment benefits over the past week, eclipsing the previous record of 695,000 set in 1982. The bill is heading for the House of Representatives for a vote today.

“In less than two weeks, we have moved from full employment to a number of job destruction we have never experienced in a period of peace,” wrote Christopher Dembik, head of macro analysis at Saxo Bank.

Earlier yesterday, Federal Reserve Chair Jerome Powell said the US economy is likely in recession already but that reopening businesses should be dictated by the control of the virus’ spread, in contrast to the urging by some of President Donald Trump’s advisers for a faster reopening. The president himself has said he wants the economy to be “roaring” by Easter, in a little over two weeks.

The astronomical number of jobless filings left some wondering if the stimulus package, despite its size, would be enough.

“If these numbers continue for three or four weeks, there will be demand for more fiscal support,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

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