Stocks dip, bonds edge higher, rates of infection rise


NEW YORK (Reuters) – Global equity benchmarks dipped and U.S. government bonds edged higher on Monday as investors weighed the increase in coronavirus infections in some parts of Europe and the united States with expectations of more stimulus measures to support the economic recovery.

FILE PHOTO: Traders from the output of the 11 Wall street door of the New York Stock Exchange (NYSE) in New York City, New York, UNITED states, June 11, 2020. REUTERS/Brendan McDermid

MSCI’s broadest index of shares throughout the world, has received more than 40% since the lows in March on hopes that the worst of the pandemic was over. A jump in Germany, the rate of infection over the weekend has been seen as unlikely to trigger a huge second wave, or of new prohibitions.

“The markets have climbed back … with inventory to prove the skeptic wrong yet as a world of stimulation outweighs the reality of the economy and the health of the struggles,” said Joshua Mahony, senior market analyst at IG.

MSCI global index .MIWD00000PUS shed 0.16%, after a slight decrease in Europe and Asia.

In the morning trading on Wall Street, the Dow Jones Industrial average .DJI fell 78.57 points, or 0.3%, to 25,792.89, the S&P 500 .SPX lost 5.49 points, or 0.18 percent, to 3,092.25 and the Nasdaq Composite .IXIC added 5.48 points, or 0.06 percent, to 9,951.61.

The pandemic is accelerating at the global level with the World Health Organization declaration of a record increase in global coronavirus case on Sunday.

“Coronavirus-the-margin remains an overhang, but the opening up of Europe has always seemed to be on a more solid basis than the united states/America,” said Chris Bailey, Raymond James ‘ European strategist.

The investors edge in perceived safe-haven assets, like U.S. government bonds. Benchmark 10-year notes US10YT=RR last rose 6/32 in price to yield 0.6806%, from 0.699% Friday night.

The dollar index =USD fell 0.384%, with the euro EUR= up 0.45% to $1.1225.

Rating agency Moody’s has warned that the stimulus measures will leave advanced economies with far more debt that they have accumulated over the course of the last financial crisis.

“The government debt-to-GDP ratio will increase by nearly 19 percentage points, almost twice more than in 2009 during the global financial crisis)… the rise in the debt burden will be more immediate and widespread, reflecting the seriousness and the scale of the shock caused by the coronavirus.” Moody’s has said.

The price of oil is set on tightening supplies from major producers, but concerns that the rising cases of coronavirus could dampen demand verified gains.

U.S. crude CLc1 was recently increased from 0.5% to $39.55 a barrel and Brent crude LCOc1 was at $42.06, down 0.31% on the day.

Declaration of David Randall; Editing by Nick Zieminski

Our Principles:Thomson Reuters Trust Principles.


Please enter your comment!
Please enter your name here