It’s been yet another historic week for global financial markets, which continue to experience extreme volatility in the face of a global pandemic. On Monday, U.S. stocks dropped in another wild session as the House and Senate failed for a second day to pass a rescue package to ease the impact from the coronavirus. While Senate Democrats and Republicans remained at an impasse over a proposed stimulus bill, the U.S. Federal Reserve continued its bold action, by extending loans and purchasing hundreds of billions of dollars in government debt. By Monday’s close, the Dow was down nearly 600 points, while the TSX surrendered 623 points—more than 5%–as the energy sector continued to struggle.
In a miraculous turnaround Tuesday, the Dow surged more than 11%, its biggest one-day gain since 1933, on news that Congress was finalizing a deal on a $1.6-trillion stimulus package (although the final numbers remain unclear). In Canada, the TSX staged an epic rally as well, rebounding from an eight-year low the day before. By Tuesday’s close, the TSX was up more than 1,300 points, while the Dow recovered more than 2,100 points.
News of the U.S. stimulus bill helped fuel upward moves in markets around the globe. German stocks surged 11%, and U.K. blue chips climbed nearly 10%–their best sessions since the global financial crisis in 2008. Meanwhile, South Korea’s market was up nearly 9% after the government announced its own rescue package of $80 billion.
In Canada, the TSX climbed more than 500 points on Wednesday after Parliament approved an $82-billion aid package– including $27 billion to help people and businesses deal with the pandemic and an additional $55-billion in tax deferrals. In the U.S., it was a frantic day of trading once again as the Dow and S&P notched their first back-to-back gains since February, while the Nasdaq was down slightly. Although the Dow ended in the green, it was another day of wild swings, with much of the day’s gains surrendered in the final 15 minutes of trading.
U.S. stocks continued their climb Thursday–even after data revealed a record 3.28 million new jobless claims filed for the week ending March 21. Many investors continue to remain hopeful that a $2-trillion stimulus package can help save the country’s faltering economy. By Thursday’s close, the Dow was up more than 6%, remarkably entering a new bull market.
While all three U.S. markets were up significantly, the TSX struggled to keep pace, as Brent crude dropped 2.7%.
Nevertheless, Canada’s main index finished the day with a gain of 232 points.
source https://richarddri.ca/massive-stimulus-packages-help-stabilize-markets-dow-enters-new-bull-market/
Dri Financial Group 