After Black Monday, markets are taking their breath away from the US President’s promises of new tax cuts. There is also a bet on a new Fed intervention and a maxi injection of liquidity by the ECB. Wall Street futures are also on the rise, and crude oil is recovering after yesterday’s thud.
After Black Monday , the markets seem calmed by the promises of President Donald Trump is thinking of economic measures to counteract the effects of the coronavirus. The idea is to reduce the tax burden with a ” substantial cut ” and the intervention will be explained in detail at a press conference scheduled for the afternoon: it could include cuts in taxes on income and greater coverage for absences due to illness to ensure vulnerable workers, who have self-isolated themselves.
European markets seem reassured, and Wall Street futures are also positive which, after yesterday’s sharp drop, showed gains of between 2.5 and 3 percentage points. But according to analysts, the rebound in the stock market is also “aided by the signs that China has put the spread of the virus under control, with the least number of infections since mid-January.
In short, investors appear more optimistic and the expectation for further moves by the Central Banks seems to be influencing this : tomorrow the ECB is expected to pronounce it, which should guarantee a maxi injection of liquidity while the hypothesis that the Fed is materializing you are already working on another rate cut already in the middle of the month.
Finally, the rebound in oil prices , also helped by both Aramco which has increased production and by Russia which remains a possibility of a ‘truce’ with Saudi Arabia, was a breath of fresh air for a market that has been seen sink into a nightmare, already lived thirty years ago.