Wall Street Rally on Hopes of Central Bank’s Pledge, Despite Record Jump in Unemployment Claims

  • Mar 26, 2020 GMT
  • Team Kalkine
Wall Street Rally on Hopes of Central Bank’s Pledge, Despite Record Jump in Unemployment Claims

US Markets: Broader indices in the United States traded in green - particularly, the S&P 500 index traded 86.72 points or 3.50% higher at 2,562.28, Dow Jones Industrial Average Index expanded by 830.79 points or 3.92% higher at 22,031.34, and the technology benchmark index Nasdaq Composite traded higher at 7,610.88, up by 226.59 points or 3.07% against its previous day close (at the time of writing, before the U.S market close at 11:05 AM ET).

US News: According to the Department of Labor, massive business shutdown amid Covid-19 contagion has led weekly unemployment claims soared to a hysterical count of 3.28 million last week. In Thursday’s trading session, Wall Street surged despite a record number of unemployment filings. It was driven by the fact that traders were quite optimistic on more stimulus in the pipeline. Furthermore, the Federal Reserve’s Chairman, Jerome Powell, has addressed that the continued economic expansion of the country seems over and could turn into recession despite taking several measures including - slashed interest rates to zero, unlimited bond-buying and emergency lending programs, which indicates that the central bank will never "run out of ammunition" to support the economy. While in order to curb fatal respiratory disease-induced travel demand slump, the U.S. Government has offered USD 58 billion aid to airlines businesses to forestall bankruptcies. On Thursday, G20 leaders mutually were committed to fight against deadly coronavirus pandemic and showed absolute priority to tackle it’s economic, health and social impacts. Focus is on restoring confidence, economy revival growth and preserving financial stability. On stocks front, energy sector were among the biggest gainers, shrugging off a fall in the prices. Boeing stock was among the star performer in industrial space, which was up by around 14 per cent as stimulus bill will provide the aviation sector much needed fiscal boost. In other stock specific news - the United Airlines and Alaska Airlines have cut their domestic schedules to 52% and 70% respectively due to plummeted travel demand amid Covid-19 contagion. Meanwhile, Standard & Poor's has downgraded Macy’s and Ford into “junk” status, driven by the crisis of coronavirus pandemic. At the same time, Target has also affirmed that its clothing sales tumbled 20% this month. Notwithstanding, the stock of Macy’s, Ford and Target grew around 2%.  Also, Wendy has embarked into the breakfast menu, comprising 15% of its sales in the launch week, resulting in digital sales surge to 4.3% (nearly double than last year). Wendy’s stock surged around 2% in early trading.

S&P 500 (SPX)

Top Performers*: Occidental Petroleum Corp, Synchrony Financial and Discover Financial Services shares increased by 12.75%, 10.86% and 9.67% respectively.

Worst Performers*: Nordstrom Inc, Federal Realty Investment Trust and Regency Centers Corp shares decreased by 5.64%, 5.16% and 4.44% respectively.

NASDAQ Composite (IXIC)

Top Performers*: China Xiangtai food Co Ltd, New York Mortgage Trust Inc, and Wanda Sports Group Co Ltd shares expanded by 80.57%, 55.74% and 37.88% respectively.

Worst Performers*: XpresSpa Group Inc, Capricor Therapeutics Inc and Coastal Financial Corp (EVERETT) shares plunged by 28.24%, 19.31% and 18.81% respectively.

Top Performing Sectors*: Telecommunications Services (Up 2.53%), Financials (Up 2.16%) and Consumer Non-Cyclicals (Up 2.10%).

Dow Jones Industrial Average (DJI)

Top Performers*:  Boeing Co., American Express Co. and United Technology Corp, are the top gainer and Increased by 10.12%, 8.10% and 5.47%.

Worst Performers*: Caterpillar Inc and Travelers Companies Inc are top laggards and decreased by 0.55% and 0.30% respectively.

European Markets: The London’s broader equity benchmark index FTSE 100 traded at 127.53 points or 2.24% higher at 5,815.73, the FTSE 250 index snapped at 560.80 points or 3.78% higher at 15,380.71, and the FTSE All-Share Index ended 76.77 points or 2.47% higher at 3,179.75 respectively. Another European equity benchmark index STOXX 600 ended up by 8.00 points or 2.55 per cent, at 321.38.

European News: The Bank of England has affirmed further intentions to ramp up its bond-buying programme to contain the economic disruption. While oil majors have announced around 20% slash in capital expenditures in 2020, including Royal Dutch Shell and Britain's BP. Among stocks, British Land Company surged around 6%, post reporting their dividend update today, discussing about bolstered liquidity through credit facility. Block Energy Plc rose around 36% with announcement of two acquisitions from Schlumberger. Similarly, RockRose Energy grew around 18% post announcement of their well-positioned business despite current oil market uncertainties. Whereas, Reach PLC plunged around 2% after they released their Covid-19 update today and discussed about uncertainties. In other news, the death toll due to the Coronavirus pandemic in Spain today crossed that of China and it became the second country after Italy with the greatest number of citizens falling victim to the virus. The European commission has  stated that the Public Debt to GDP ratios of several larges countries in the Eurozone is close to 100 per cent as the countries face a resurgent pressure to invest more in their domestic economies, with little scope to do so, as the fallout of the current crisis continues to damage the economic block more and more by the day. The commission further stated that under the current regulatory regimen it cannot force any governments to  make the commitments and can only make suggestions. In business news, BT Plc stock plummeted today by nearly half a per cent as news broke that the company could be losing as much as £1 billion if the sporting events continue to be cancelled till August of this year along with rival company Sky. It is to be remembered here that most of the major sports and other events in continental Europe have been cancelled because of the fear of the spread of the pandemic

London Stock Exchange

Top Performers*: BAKKAVOR GROUP PLC (BAKK), LOOKERS PLC (LOOK) and MCCARTHY & STONE PLC (MCS) are top movers and rose by 35.82%, 25.62% and 22.89% respectively.

Worst Performers*: PHOTO-ME INTERNATIONAL PLC (PHTM), HOSTELWORLD GROUP PLC (HSW) and CHESNARA PLC (CSN) plunged by 13.28%, 13.19% and 11.54% respectively.

FTSE 100 Index

5 days FTSE 100 Index Performance (March-26-2020), before the market closed (Source: TR)

Best Gainers*: STANDARD LIFE ABERDEEN PLC (SLA), LEGAL & GENERAL GROUP PLC (LGEN) and RIGHTMOVE PLC (RMV) expanded by 8.53%, 7.81% and 7.53% respectively.

Non Performers*: BRITISH LAND CO PLC (BLND), ROYAL BANK OF SCOTLAND GROUP PLC (RBS) and LAND SECURITIES GROUP PLC (LAND) plunged by 6.70%, 6.69% and 5.56% respectively.

Shares traded with high-level volume*: (LLOY) LLOYDS BANKING GROUP PLC;(VOD) VODAFONE GROUP PLC and (BARC) BARCLAYS PLC.

Top Sectors traded in the positive zone*: Technology (up 1.59%), Consumer Cyclicals (up 1.37%) and Consumer Non-Cyclicals (up 0.79%)

Top Sectors traded in the negative zone*: Energy (down 2.90%), Basic Materials (down 2.23%) and Financials (down 1.30%).

Forex Rates*: GBP/USD and EUR/GBP were hovering at 1.2148 and 0.9077, respectively.

Bond Yields*: U.S 10-Year Treasuries yield was tilting at 0.795%, and the UK 10-Year Government Bond yield was hovering at 0.386%, respectively. 

*At the time of writing

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