Meager Rally Lifts Stocks to Cap Off Week of Woe

MANHATTAN (CN) — Markets on Friday built upon the previous day’s modest gains, in what investors hope is a mini-rally to close out a down week.

Stock futures increased overnight, with the Nasdaq at one point hitting its 5% “limit-up” thresholds. A few minutes after the morning bell, the Dow Jones Industrial Average and S&P 500 each creeped up by less than 1 point and the Nasdaq increasing by 1.8%

(AP Photo/Mark Lennihan)

European markets saw a boost, as well, with markets in France and Germany up roughly 4% and the Stoxx 600 up about 2.5% as of 9 a.m. E.S.T.

Asian markets also mostly increased, with South Korea’s KOSPI leading the pack at 7.4% and Hong Kong’s exchange up 5%.

The gradual increases are a welcome reprieve from an incredibly volatile market that has seen 500-point gains followed a day later by 1,500-point declines.

President Trump stressed Thursday that, while the economy is suffering now, “things will go very nicely” once the spread of coronavirus is halted.

The upswing follows the president’s announcement of the Food and Drug Administration’s forthcoming approval of malaria drugs to help treat COVID-19, as well as the passage of the second stimulus package.

Lawmakers are now working on a third stimulus, which is expected to dwarf the first two in size and scope.

Most Americans would get direct payments under the current Phase III stimulus proposal, worth about $1 trillion, though individuals and families making above a certain amount of income would receive nothing.

The package also includes $300 billion in small business loans, as well as targeted funds for such ailing industries as airlines.

Covid-19, the new strain of coronavirus responsible for a global pandemic, has now affected more than 246,000 worldwide and 14,000 confirmed throughout the entire United States, according to data compiled by Johns Hopkins University.

Data show more than 10,000 have died globally from the virus, with now more than 200 deaths in the United States.

Unemployment numbers meanwhile have skyrocketed, with some state websites reportedly crashing as a result of high traffic.

The Department of Labor announced Thursday that it saw 281,000 seasonally adjusted unemployment claims during the week ending March 14, the highest reported since September 2017.

Accurate unemployment numbers may soon be hard to find.

According to an email obtained by The New York Times, U.S. Labor Department has asked state labor departments not to release exact unemployment data.

Instead, they should “provide information using generalities to describe claims levels,” according to the email, which was attributed to Gay Gilbert, an administrator at the department. “States should not provide numeric values to the public.”

Others say rising unemployment is a done deal. Estimates from the United Nations painted a bleak picture of anywhere from 5.3 million to nearly 25 million unemployed worldwide.

Former Trump economic advisor Gary Cohn warned in an interview on CNBC on Thursday that “I believe that we are going to have massive unemployment very, very quickly.”

The full damage from the current crisis likely won’t be known for months.

Former Federal Reserve Governor Kevin Warsh warned about businesses shuttering a few months from now, suggesting the Fed and lawmakers need to spread liquidity across the broader economy.

“What appears now in my judgment as a liquidity crisis could turn into a solvency crisis,” Warsh said in a Friday morning interview on CNBC.

“Time is going to be running against the Fed,” Warsh said. “So I do believe the time is right now for this full reliquification of the economy and it requires all parts of government to act in concert.”

On Thursday, Bridgewater founder Ray Dalio said the coronavirus could ultimately cost U.S. businesses up to $4 trillion, and $12 trillion globally. “What’s happening has not happened in our lifetime before,” he said.

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