Markets soar as new cases decline in Europe and NYC
Weekend data showing declines in new COVID-19 cases in hot spots Italy and Spain as well as Germany pushed futures up Sunday night and inspired buying on Monday as markets soared. Fueling the optimism was news from New York state Governor Andrew Cuomo that new cases were also retreating in New York City, now the epicenter of the virus. Cuomo doubled-down on social distancing measures, however, to keep “flattening the curve” of new cases.
By Monday’s close, the Dow leapt 7.73% while the TSX rose 5%, as it was handicapped by falling oil prices. The online OPEC meeting scheduled for Monday was suddenly pushed to Thursday after the Saudis and Russians exchanged jibes over the weekend. The delay triggered a 25% sell-off in WCS to $9.
Markets have risen 20% since the March 23 trough when markets had plunged 35% from the Feb. 19 peak. In other words, markets now sit in the middle of this see-saw range since the pandemic begun. Monday’s rally saw a definite risk-on sentiment as tech startup, Lightspeed, shot up 23%. Investors also devoured fast-food stocks like Restaurant Brands, which sizzled by 13.59%, and Chipotle, which rallied 13%. Even luxury clothing brand, Canada Goose, soared over 13%. Flipping the script of recent sessions, financials and materials were up on both sides of the border while consumer staples trailed. For instance, American Express climbed 14%. During this pandemic, rallies usually follow with a sharp sell-off, but investors were happy to see gains to start the week.