- DJIA adds around 1,163 points, or 4.9%, to end at 25,014.
- The S&P 500 SPX finished around 135 points higher, up 4.9%, near 2,882.
- The Nasdaq Composite ended around 8,344, up 394 points, or 5%.
In a dramatic turnaround on Tuesday, following the worst day since 2008 crisis, US benchmarks ended on Wall Street in the green with the Dow breaking back above the psychological 25,000 mark. Fears that government attempts to contain the epidemic may also shut down economic activity globally sent stocks crashing towards official bear trend territory before a midday rebound on news of President Trump’s proposal for a payroll tax cut.
Despite the biggest one day fall in crude oil prices since the 1991 Gulf War and the coronavirus spread, the news that a payroll tax relief and other measures to help businesses deal with the coronavirus outbreak was enough to lift spirits on Wall Street. Trump said he would announce more details and discuss “a possible payroll tax cut or relief, substantial relief, very substantial relief, that’s big, that’s a big number,” the Associated Press reported. Consequently, the Dow Jones Industrial Average, DJIA, added around 1,163 points, or 4.9%, to end at 25,014, the S&P 500 SPX finished around 135 points higher, up 4.9%, near 2,882 and the Nasdaq Composite ended around 8,344, up 394 points, or 5%.
Coronavirus drawing in fiscal stimulus
Analysts at ANZ Bank note that the expectations of a co-ordinated fiscal response conducted at a national level in the US and Europe are rising:
"EU leaders are holding an emergency call. Post-GFC, the EU implemented an economic recovery plan which cost €200bn or 1.5% of GDP.
The US has advised it is considering cutting payroll taxes for 90 days as well as looking at ways to support businesses such as loan packages. Italy is planning on suspending debt repayments to assist families and businesses and previously announced a €7.5bn package.
Spain has created a €20bn special line of credit for small businesses.
Germany is reported to be considering removing banking sectors capital buffer to boost liquidity and available credit.
The UK is expected to announce a range of measures in its budget announcement later this week and the BoE may cut rates at the same time.
The fiscal response from the NZ government has so far been small and targeted compared to the wider ranging measures being deployed elsewhere."
DJIA levels
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