Stocks Jump With Futures Amid U.S. Reopening Plans: Markets Wrap

(Bloomberg) — Stocks advanced with U.S. equity futures as tentative steps toward restarting the world’s largest economy helped investors look past mixed progress on curbing the coronavirus and China’s first contraction in decades. The dollar and Treasuries edged lower.

The Stoxx Europe 600 Index opened strongly higher, with all 19 industry groups in the green. Contracts on the S&P 500 jumped over 2.5%, putting the benchmark on course for its first back-to-back weekly gain since before the market turmoil began. President Donald Trump outlined plans to reopen the economy and investors assessed a report that Gilead Sciences Inc. saw improvements in virus sufferers taking its drug. West Texas oil slumped to below $19 a barrel. Gold fell.

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 post-market after the plane maker said it will resume commercial production at a plant near Seattle next week.

Investors in risk assets are ending the week on an optimistic note after the White House set guidelines to reopen the economy, though it has yet to ensure that widespread testing will be available, as many business leaders have urged. The pressure is on the president, with the total number of Americans seeking unemployment benefits rising to 22 million in a month.

“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.”

Elsewhere, investors largely shrugged off data showing 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. The yuan edged higher offshore and Chinese shares gained.

Meanwhile, the Australian dollar climbed. India’s central bank pledged to boost liquidity and expand bank credit; shares rallied.

These are some of the main moves in markets:

Stocks

The Stoxx Europe 600 Index gained 2.8% as of 8:19 a.m. London time.Futures on the S&P 500 Index advanced 2.9%.The MSCI Asia Pacific Index climbed 1.9%.The MSCI All-Country World Index rose 0.9%.

Currencies

The Bloomberg Dollar Spot Index dipped 0.1%.The euro was little changed at $1.0838.The British pound was little changed at $1.2458.The Japanese yen strengthened 0.1% to 107.78 per dollar.

Bonds

The yield on 10-year Treasuries rose two basis points to 0.64%.The yield on two-year Treasuries advanced one basis point to 0.21%.Germany’s 10-year yield gained one basis point to -0.47%.Spain’s 10-year yield dipped one basis point to 0.821%.

Commodities

West Texas Intermediate crude slumped 6.3% to $18.62 a barrel.Iron ore advanced 0.7% to $83.05 per metric ton.Gold weakened 1.3% to $1,695.43 an ounce.LME aluminum climbed 1% to $1,527.50 per metric ton.

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