Re-opening plans bolster world markets
From New Zealand to Slovakia, several countries on Monday the announced plans to ease their lockdowns and gradually re-open their societies as the numbers of new cases continues to decline. This optimism lifted markets, from Asia where the Nikkei rallied 2.71% to the German DAX, up 3.13%. In New York, the Dow rose 1.51% and closed above its 50-day moving average for the first time since March 4. The TSX also climbed 1.54%.
Quebec announced tentative steps by re-opening elementary schools and daycares opening starting May 11 (Montreal on May 19) under certain conditions. The province, which bears the highest number of COVID-19 cases, will also triple daily medical testing. In contrast, Ontario announced a broad plan to re-open, but did not specify a schedule, which frustrated some. Re-opening will depend on medical data. In particular, Ontario is battling the virus in its long-term care homes for the elderly.
Monday was a risk-on session which saw the real estate sector soar nearly 5% and financials by 3%. Fairfax Financial popped nearly 10% while Chartwell and Sienna (both battling the virus in a portion of their retirement homes) rose over 8%. Surprisingly, Canopy grew like a weed by more than over 12%. CN reported a Q1 earnings beat and that it would maintain its dividend, but withdrew its forecast, like so many companies recently. On Wall Street, the big gainers included Disney, up 4.81% and JPMorgan up 4.31%.
Underscoring Monday’s rally was the continuing plight of crude oil. WTI plunged 23% to below $13 while WSC shed 21% to fall below $7. Despite deep cuts by OPEC, the problem remains of where to store all this oil until drivers return to the roads.