U.S. stocks rallied on Monday morning after encouraging news from Europe and New York pointed to slowing death rates from the coronavirus, though those early signs of success will likely be tempered by a tough week ahead: case numbers and death counts are expected to peak all across the United States this week, Forbes.com reports.
At Thursday’s open, the Dow Jones Industrial Average gained 4.0%, nearly 850 points, while the S&P 500 was up 3.8% and the Nasdaq Composite gained 3.7%.
Over the weekend, New York Gov. Andrew Cuomo said that the state’s number of coronavirus deaths and hospitalizations has gone down, but it is “too early” to tell the significance of the reduced numbers.
“Incoming data suggests NY state might peak sooner than Cuomo’s optimistic case,” Tom Lee, head of research at Fundstrat, said in a client note. “With better visibility on the healthcare crisis in the US, particularly, on a potential to model a national peak, we believe buyers are now taking control.”
Billionaire hedge fund manager Bill Ackman echoed the sentiment on Twitter:
I am beginning to get optimistic. Cases appear to be peaking in NY. Almost the entire country is in shutdown. Hydroxychloriquine and antibiotics appear to help. There is increasing evidence that the asymptomatic infection rate could be as much as 50X higher than expected.— Bill Ackman (@BillAckman) April 5, 2020
Death rates in Italy, Spain and France—the countries with the highest coronavirus death tolls globally—have also slowed in the last couple of days.
This morning, JPMorgan JPM CEO Jamie Dimon took a less optimistic approach. He warned of a “bad recession combined with some kind of financial stress similar to the global financial crisis of 2008” in his highly-anticipated annual letter to shareholders.
In the United States, there are more than 337,000 confirmed cases of the virus and more than 9,600 people have died. The stock market ended last week down only 2.6% despite a slew of worsening economic data. Weekly jobless claims surged to a staggering 6.6 million—the highest level ever recorded. Some 10 million Americans filed for unemployment in the last two weeks alone, data shows.
Oil also cut some, though not all, of its losses on Monday on news that Russia and Saudi Arabia are “very, very close” to reaching a deal on oil production cuts, CNBC reports. The two oil producing giants have been embroiled in a price war that has devastated the oil market amid a major demand slump caused by the coronavirus. At 10:00 a.m. ET on Monday morning the Brent crude international benchmark was down 1.8% to $33.50 per barrel.