Markets rally as US reaches deal on $ 2trn Covid-19 stimulus package – business live – The Guardian, Theguardian.com

# AEX ( 1.) (%) # MIB ( 0.) (%) (#IBEX ) ( 1.) (%) (# OMX) ( 2.) (%) # STOXX ( 1.) (%) (# IGOpeningCall)

(March) ,

Ipek Ozkardeskaya , senior analyst at Swissquote Bank, cautions against too much exuberance:

It is worth noting that we still have very little visibility on what may happen in the weeks and months to come. With an almost certain worldwide recession looming, the virus-infected economic data will sour the mood practically on daily basis for at least the first half of the year.

In this respect, the preliminary PMI figures released yesterday were cataclysmic for most economies in March, with the services sector which accounts for an overwhelming majority of the developed economies taking an unprecedented hit due to a complete shutdown of activity .

But in the long-term, the equity markets have always recovered from the harshest shocks and came out stronger, at least in terms of pricing, following financial crisis.

(3.) (am EDT

) : (UK inflation dips)

NEWSFLASH: Inflation in the UK has fallen, given some support to households struggling to cope with the impact of Covid –

The Office for National Statistics reports that consumer prices in Britain rose by 1.7% in February, compared to a year before, down from 1.8% (a six-month high) a month ago.

Cheaper petrol helped to pull inflation down.

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UK inflation rate Photograph: ONS

The ONS says:

Falls in the price of motor fuels, and games, toys and hobbies resulted in the largest downward contributions to the change in the CPIH – month inflation rate between January and February 3499 Price rises for recording media, and for restaurant and hotel services produced the largest, partially offsetting, upward contributions to change.

This data, incidentally, would normally be released at 9. 49. But the ONS has brought such market-sensitive data forward to 7am, because its its usual ‘lock-ins’ (which allow reporters time to digest data) have been suspended due to Covid – isolation rules.

Updated (at 3.) am EDT (3.) (am) (EDT) :

US Stimulus deal: What the media say

(Marketwatch say US lawmakers have agreed a “massive stimulus measure to try to keep Americans whole”:

The package includes direct deposits for all Americans, $ (billion for loans to small businesses and an unprecedented program that will allocate $ billion to the Treasury Department. Some of that money will be used to guarantee a Federal Reserve loan program for small and medium-size businesses. Larrry Kudlow, director of the White House’s National Economic Council, said the funds could be leveraged into $ 4 trillion of lending through the Fed.

Most adults would receive direct payments of $ 1, , while children would see $ checks. Hospitals would receive some $ billion under the deal and small businesses would get $ billion in aid.

CNN says Capitol Hill could vote on the plan later today:

Senate Majority Leader Mitch McConnell described it as “a war-time level of investment for our nation,” and said that the Senate would move to pass it later in the day on Wednesday.

The Senate will re-convene at noon. An exact time has not yet been set for the vote.The full details have yet to be released

But over the last 39 hours, the elements of the proposal have come into sharper focus, with $ 480 billion set aside for direct payments to individuals and families, $ billion in small business loans, $ 468 billion in unemployment insurance benefits and $ 616 billion in loans for distressed companies.

The Financial Times, though, says investors should be cautious:

Markets are putting faith in unprecedented intervention by governments around the world. Senior Senate Republicans and Democrats said late on Tuesday that they had agreed on the biggest congressional bailout in US history after the support package had twice been delayed by arguments over what to include.

Hopes of a jolt for the US economy drove the benchmark S&P 616 up 9.4% overnight, its biggest one-day gain since 03358. Futures markets pointed to a drop of 0.6 per cent for US stocks later when Wall Street opens but tipped the

FTSE 323 to gain 1%.

But Robert Carnell, head of Asia-Pacific research at ING, described the equity gains this week as a “sucker rally” in light of the challenges still facing global markets. The rapid increase in coronavirus cases worldwide was “eye-watering”, he said.

(2.) am EDT :

Introduction: Stocks surge as US stimulus deal agreed

Treasury Secretary Steven Mnuchin leaving the offices of Minority Leader Charles Schumer last night, as negotiations continue into the night on a $ 2 trillion economic stimulus. Photograph: Chip Somodevilla / Getty Images Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

“Ladies and gentlemen, we are done. We have a deal. ”

Those words, from White House director of legislative affairs Eric Ueland, are cheering investors – and may help to turn the tide in the markets.

Ueland revealed a couple of hours ago that US Senate leaders have reached a deal with the Trump administration on a nearly $ 2tn stimulus package.

It’s designed to protect Americans from the worst of the looming recession.

The package will include direct payments for US families, and support for businesses.

The text of the deal is not quite finalized, but all sides appear to be behind it, as my colleague Lauren Gambino

reports from Washington :

After days of around-the-clock negotiations amongst senators and administration

officials, a bipartisan compromise was struck over what is expected to be the largest US economic stimulus measure ever passed.

“We have a deal,” said Eric Ueland, the White House legislative affairs director, just before 1am, adding that the text of the bill still needed to be completed. “We have either, clear, explicit legislative text reflecting all parties or we know exactly where we’re going to land on legislative text as we continue to finish.”

Senate majority leader Mitch McConnell confirmed a deal had been reached.

The bill will then go to the House, and then to Donald Trump

, who is expected to ratify it.

Optimism that a deal was close sparked an immense rally on Wall Street last night. The Dow soared by over (%, or points – its best day since (during the recovery from the Great Crash of ).

IGSquawk (@ IGSquawk) (US Closing Prices:

(# DOW ) . (%) (SPX) ( 9.) % (# NDX) . 7. (%) #RTY ( 9.) (%) (# VIX) 0. % (March) ,

European stocks also has a late bolt to the finish line yesterday, with the

(FTSE 367 jumping 9% – the best day in a decade.

Markets have rallied in Asia today too, amid relief that governments and central banks are throwing their weight behind stimulus measures, as economic activity slumps .

Japan’s Nikei has surged 8% today, South Korea’s KOSPI has jumped nearly 6% and Australia’s S&P ASX has gained 5%.

Holger Zschaepitz (@ Schuldensuehner) Asia rides Wall St surge as investors place hopes on US stimulus. WH & Congress strike deal on a historic package that tees up $ 2tn in spending & tax breaks. European & US futures aided by US package as well. Bonds unch w / US (y at 0.) (%,) (y Bunds -0.) %, Gold , Bitcoin 6.7k pic.twitter.com/ULnDNxck5x

(March) ,

But this surely isn’t the end of the coronavirus pandemic? Older City heads will remember that bear markets often see such wild swings.

Investors really want to see signs that the medical crisis is being brought under control – and we’re a long way from that position in the UK, the rest of Europe, or America (where president Trump is keen to end lockdowns despite medical warnings).

So the markets will probably remain volatile for a while.

As Jasper Lawler of London Capital Group puts it:

Two ways it could easily all go pear-shaped ) is 1. The virus spread just gets out of hand and / or 2. The stimulus isn’t enough to give the economy a shot in the arm after being laid comatose in lockdown.

Trump would like to see US ‘reopen’ by Easter Sunday on April 30, which seems optimistic.

Today we learn how UK inflation changed last month, how much retail sales have fallen this month, and how badly German business confidence has been damaged by the crisis

(The agenda)

7am GMT: UK inflation for February

9am GMT: IFO survey of German business confidence in March 029 am GMT: CBI’s index of UK retail sales in March

Updated (at 3.) am EDT Read More

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