Stocks Climb as U.S. Paves Way to Reopen Economy: Markets Wrap

(Bloomberg) — Asian stocks climbed with U.S. and European futures amid tentative steps to restart the American economy and progress on the fight against the coronavirus. Traders looked past Chinese data showing its economy contracted for the first time in decades.

Shares saw strong gains across the region, while contracts on the S&P 500 jumped over 3%. Treasuries fell with the dollar. Earlier, President Donald Trump outlined plans for the reopening and investors assessed a report that Gilead Sciences Inc. is seeing improvements in coronavirus sufferers taking its drug. Oil fluctuated around $20 a barrel. Gold fell, though the yen strengthened against the greenback.

In a volatile U.S. session Thursday, the S&P 500 closed higher and the Nasdaq 100 wiped out its losses for 2020. Shares of Boeing Co. surged after-hours after saying it will resume commercial plane production at a plant near Seattle next week.

With investor focus on economic data this week, China’s gross domestic product shrank 6.8% in the first quarter from a year ago, the worst performance since at least 1992 and below the consensus forecast of a 6% drop. In the U.S., more than 5 million Americans filed for unemployment benefits last week, bringing the total in the month since the outbreak throttled the U.S. economy to 22 million.

“The market is a bit optimistic right now,” and is underestimating the hit to earnings, David Bailin, chief investment officer at Citi Private Bank, said on Bloomberg TV. “Ultimately we have to have really great coordination in order to see any real improvement in the economy.”

Trump’s guidelines could allow states and employers to abandon within four weeks most social distancing practices to curb the coronavirus outbreak. The president has been eager to return Americans to work and to schools even as the outbreak crests in the U.S., with more than 650,000 cases and 31,000 deaths. He briefed governors Thursday on guidelines his administration titled “Opening Up America Again.”

Elsewhere, the Australian dollar climbed and the country’s bonds fell amid the risk-on tone. India’s central bank pledged to boost liquidity and expand bank credit, as it ramps up support for its economy.

These are some of the main moves in markets:

Stocks

Futures on the S&P 500 advanced 3.1% as of 7:03 a.m. in London. The gauge climbed 0.6% on Thursday.Japan’s Topix index added 1.4%.South Korea’s Kospi rose 3.2%.Australia’s S&P/ASX 200 Index gained 1.9%.Shanghai Composite Index rose 1.1%.Hang Seng Index rose 2.4%.Euro Stoxx 50 futures climbed 2.8%.

Currencies

The euro rose 0.2% to $1.0863.The yen rose 0.2% to 107.72 per dollar.The offshore yuan traded up 0.1% to 7.0817 per dollar.

Bonds

The yield on 10-year Treasuries climbed three basis points to 0.66%.Australia’s 10-year yield rose two basis points to 0.86%.

Commodities

West Texas Intermediate crude slid 1.2% to $19.65 a barrel.Gold fell 1.7% to $1,689 an ounce.

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