Market Gives Back All Its Gains From St Patrick’s Day Rally

In what would have been one of the busiest days of the year across the hospitality industry, many pubs and bars found themselves empty as people chose to (or had to) stay in their homes and miss out on the usual St Patrick’s Day festivities. As a small consolation for investors who had to stay in, markets rallied with major indices gaining between 5% and 6%. Unfortunately, the rally was short lived, with US futures hitting their 5% limit down circuit breaker once again overnight. The Nasdaq (NDX), in particular, toyed with a significant support level a little below the 7000 mark for the third time in a week, but continues to hold up for now.

Asian stocks also plunged again as fears about COVID-19 outweighed fiscal policy responses, despite many Chinese businesses beginning to reopen. Virus fears continue to outweigh multiple government’s attempts at reassurance with monumental economic bailout packages. The FTSE 100 has dropped more than 4% on opening this morning, despite Chancellor, Rishi Sunak, laying out his £330bn stimulus package in a speech yesterday. 

News broke yesterday that President Trump’s administration is seeking a trillion-dollar stimulus package that could include sending Americans $1,000 checks in the coming weeks. Following this, 10-year US Treasury yields (SPTL) climbed back above 1%, having been below half that rate earlier in the month. Treasury Secretary Steven Mnuchin reportedly warned Republican senators that without action the pandemic could drive US unemployment up to 20%. Meanwhile, Marriott (MAR) said it will put tens of thousands of employees on unpaid leave. 

One bright spot among the sea of red this morning is UK supermarket Morrison (MRWSY). It’s shares have been given a boost after the company reported like-for-like sales are up an impressive 5% year on year for the first six weeks of 2020. With well documented long queues and empty shelves all over the country, investors are possibly backing supermarkets to fare much better than many businesses throughout the Coronavirus crisis as worried consumers stock up on essentials. However, whether this is sustainable is hard to predict. The reality is we don’t know how disruptive the pandemic will be to supermarkets’ supply chains and whether or not sales will be hit in the future. Sector peers Tesco (TSCDY) and Sainsbury’s (JSAIY), also positive this morning, report their results on April 8th and April 30th respectively.

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