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Stocks Rally Eases; Dollar Recoups Some Ground: Markets Wrap

Pedestrians wearing protective masks are reflected in an electronic stock board outside a securities firm in Tokyo, Japan, on Friday, March 13, 2020. Japanese stocks tumbled, capping their worst week since 2008, as investors speculated over the scale and impact of government and central bank actions to counter the coronavirus. Photographer: Kiyoshi Ota/Bloomberg

The global stock rally powered by investor optimism for a speedy economic recovery from the pandemic paused Thursday. The dollar recouped some of the losses that pushed it to the weakest since early March.

Equities in Japan erased gains of as much as 1%. South Korea, Hong Kong and Australia pared advances, while Chinese stocks fluctuated. U.S. equity futures slipped after the Nasdaq 100 earlier briefly surpassed its February closing record and banks led the S&P 500 Index to a three-month high. Treasuries retained declines as investors turned away from havens after U.S. private payrolls showed fewer job losses than forecast in May. Australian 10-year yields rose back above 1% for the first time since March.
Dollar gauge below its 200-day moving average may signal boost for stocks

The reopening of global economies has turned into a tailwind for stocks, along with unprecedented levels of stimulus across the world. Wednesday’s advance was driven by financials, autos and durable goods manufacturers, indicating the rally is broadening out. Big tech shares lagged.

“People are seeing the damage to the economy abate and investors now believe there is light at the end of tunnel,” Susan Schmidt, a portfolio manager at Aviva Investors Americas LLC, said on Bloomberg TV. “We will continue to see support for the stock market.”

Next up comes the European Central Bank, which is expected to boost its rescue program Thursday. Chancellor Angela Merkel’s coalition earlier agreed on a sweeping 130 billion-euro ($146 billion) stimulus package designed to spur short-term consumer spending and get businesses investing again. Meantime, tensions continue to simmer with the U.S. barring Chinese airlines in retaliation for Beijing ignoring the requests of American carriers to resume flights to China that had been suspended for the pandemic.

Elsewhere, oil edged lower after trading close to its at highest level since early March amid optimism that OPEC+ will rebalance the market.

Here are some key events coming up:

  • The European Central Bank is expected to top up its rescue program with an additional 500 billion euros of asset purchases at a meeting on Thursday. Anything less than an expansion would be a big shock, Bloomberg Economics said.
  • The U.S. labor market report on Friday will probably show American unemployment soared to 19.5% in May, the highest since the 1930s.

These are the main moves in markets:


  • Futures on the S&P 500 Index slid 0.2% as of 11:23 a.m. in Tokyo. The gauge rose 1.4% on Wednesday.
  • Japan’s Topix index was little changed.
  • Hong Kong’s Hang Seng was little changed.
  • The Shanghai Composite was little changed.
  • South Korea’s Kospi index rose 0.5%.
  • Australia’s S&P/ASX 200 Index added 0.5%.
  • Euro Stoxx 50 futures dipped 0.5%.


  • The yen was little changed at 108.91 per dollar.
  • The offshore yuan held at 7.1306 per dollar.
  • The euro bought $1.1221, down 0.1%.
  • The Bloomberg Dollar Spot Index edged up 0.1%, though remains down 1.1% this week.


  • The yield on 10-year Treasuries ticked lower to 0.74%.
  • Australia’s 10-year yield rose three basis points to 1.00%.


  • West Texas Intermediate crude dipped 1.8% to $36.61 a barrel.
  • Gold was at $1,703.93 an ounce after tumbling 1.6% on Wednesday.

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