Global Markets: Stocks, crude plunge on economic data, oil oversupply
By Herbert Lash NEW YORK (Reuters) - A double whammy of economic data showing the U.S.
By Herbert Lash
NEW YORK (Reuters) - A double whammy of economic data showing the U.S. economy in a deep downturn and reports of persistent crude oil oversupply and collapsing demand slammed global markets on Wednesday as vivid reminders of the damage from coronavirus-related lockdowns.
Oil prices sank after the International Energy Agency (IEA) forecast a 29-million-barrel per day dive in April crude demand to levels not seen in 25 years and said no output cut could fully offset the near-term decline facing the market.
Shares on Wall Street followed European stocks lower as a raft of dour earnings from U.S. banks and a slide in listed oil heavyweights in London and Paris due to the outlook for crude prices pushed major stock indexes lower.
Uncertainty still prevails in markets as it's not clear when economies are going to come out of the pandemic-driven slowdown, said Candice Bangsund, a global asset allocation strategist at Fiera Capital in Montreal.
"Our premise has been that uncertainty and near-term market gyrations are going to continue until we get more clarity on the status of the outbreak," Bangsund said. "Until the virus peaks globally, there's little visibility in that regard."
U.S. retail sales plunged 8.7% last month, the biggest decline since the government started tracking the series in 1992, while manufacturing output dropped by the most in just over 74 years in March.
The retail sales data set U.S. consumer spending up for its worst decline in four decades.
MSCI's gauge of stocks across the globe <.MIWD00000PUS> shed 2.46% and emerging market stocks lost 1.15%.
The Dow Jones Industrial Average <.DJI> fell 614.79 points, or 2.57%, to 23,334.97. The S&P 500 <.SPX> lost 76.05 points, or 2.67%, to 2,770.01 and the Nasdaq Composite <.IXIC> dropped 162.68 points, or 1.91%, to 8,353.06.
Bank of America
In Europe, oil companies Total SA
U.S. crude fell 3.08% to $19.49 per barrel and Brent was at $27.48, down 7.16%.
U.S. Treasury yields fell across the board as risk aversion flared up again. U.S. two-year yields dropped below 0.2% for the first time in three years.
Benchmark 10-year notes rose 35/32 in price to push their yield down to 0.6411%.
The dollar firmed as investors fled risk assets for safe havens. The U.S. dollar index, which had fallen in the four previous trading days, rose as high as 99.98.
The dollar index rose 0.736%, with the euro down 0.63% to $1.091. The Japanese yen weakened 0.20% versus the greenback at 107.45 per dollar.
China earlier moved again to cushion its economy, cutting a key medium-term interest rate to record lows and paving the way for a similar reduction in benchmark loan rates, while reducing the amount banks must hold as reserves.
Those moves are injecting a combined $43 billion into the world's second-largest economy, but they failed to boost global shares. MSCI's All-Country World Index <.MIWD00000PUS>, which tracks shares across 49 countries, was down 0.6%.
(Reporting by Herbert Lash; Editing by Bernadette Baum)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.