US stocks opened higher on Tuesday after large gains in Europe and Asia as investors looked past the start of a potentially grim profit season and focused instead on a slight rebound in exports Chinese.
The S&P 500 rose more than 2% at the start of trading in New York, picking up momentum after the drops from the previous day.
The upward movement occurred despite the publication of results from major American banks which showed the initial extent of the damage caused by the coronavirus epidemic. JPMorgan Chase, the largest US bank, said profits fell 69% in the first quarter as it increased provisions for potential losses on loans to crisis-hit customers. Wells Fargo said net income had dropped nearly 90%.
The Stoxx Europe 600 was up 0.8% early in the afternoon, after increasing 1.3% at the start. The Dax 30 in Frankfurt was up 1.5%, while the FTSE 100 in London was the only major index down, 0.6% lower. The British government has indicated that there are no immediate plans to relax the foreclosure measures.
Chinese exports fell much less in March than analysts had expected, as the country ended blockages aimed at fighting the spread of the coronavirus. The Chinese CSI 300 index of stocks listed in Shanghai and Shenzhen closed up 1.9%.
“Although the data has not always been shown to be reliable, it suggests that the Chinese economy is beginning to stabilize faster than expected,” said Sébastien Galy, senior macro strategist at Nordea Asset Management.
Various analysts have warned that the economic respite may be short-lived, with a collapse in foreign demand offsetting the easing of supply-side constraints. Barclays analysts predicted a 20-30% contraction in Chinese exports in the second quarter – up from 13% in the first – driven by “an expected slowdown in the growth of the country’s main trading partners”.
Oil prices gave up their previous gains as concerns persisted as to whether a US-backed Opec deal to reduce supply would be enough to offset the global glut of crude. Crude oil Brent, the international benchmark, fell more than 2% to $ 31.01 a barrel, while West Texas Intermediate lost 4.1% to $ 21.50.
The S&P 500 has recovered a good part of its losses since its plunge in late February and early March, optimistic, the virus was approaching its peak. However, it remains 18% of its highest historical level.
“It is remarkable that the United States is in the midst of its greatest economic crisis for almost a century and an unprecedented societal disturbance as the stock market is trading at the same level as in June 2019, there are only 10 months, “analysts at Goldman Sachs told me.
Markets anticipate a strong economic recovery, in part thanks to massive intervention by the Federal Reserve, including new cash injections of up to $ 2.3 billion announced last week.
“As staggering as it may be, it is probably not enough,” said Rabobank. “If we were to see a second wave of viruses later in the year, then $ 2.3 billion is far too small to save everyone.”
Yields on 10-year US Treasuries fell 0.03 percentage points to 0.74%, indicating higher prices.