A worldwide rally gained steam on Wall Street Monday, propelling major indexes up more than 7%, as traders cheered glimmers of hope that the deadliness of the coronavirus outbreak could be slowing in some of the hardest-hit areas.
New York Gov. Andrew Cuomo said the rate of increase of deaths could be approaching a plateau, but he cautioned it was far too early to say the worst had passed. European and Asian markets also rose. Bond yields rose as investors became somewhat less pessimistic about prospects for the economy. The price of oil fell after a meeting between big producers about cutbacks was postponed.
New coronavirus infections and deaths are showing signs of slowing in Italy and Spain. The center of the U.S. outbreak, New York, also reported the number of daily deaths has been effectively flat for two days. That was enough to launch stocks higher, even though the U.S. is still bracing for a surge of upcoming deaths due to COVID-19 and Cuomo said restrictions should stay in place to slow its spread.
“We’re running on raw optimism, maybe that’s the best way to put it,” said Randy Frederick, vice president of trading and derivatives at Schwab Center for Financial Research.
Investors have been waiting anxiously for a glimmer of hope that the rate of new infections may hit its peak, which would give some clarity about how long the upcoming recession will last and how deep it will be. Without that, markets have been guessing about how long businesses will remain shut down, companies will lay off workers and flights remain canceled due to measures meant to slow the speed of the outbreak.
“The virus is not everything, it’s the only thing, and nothing else really matters” to the markets, Frederick said, particularly in a week that is relatively light on economic reports.
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