Stock markets hit seven-week highs as Fed leaves interest rates on hold - as it happened

Graeme Wearden

from on 2020-04-29 20:08 (#52T6Q)

US central bank says borrowing costs will remain at historic lows until America has weathered the coronavirus crisis

9.07pm BST

And finally, Wall Street has closed at its highest level in seven weeks.

Stocks were lifted by the Fed's commitment to act appropriately to protect the US economy from the Covid-19 recession, and by optimism that economies will recover as lockdowns are eased soon.

Stocks jumped Wednesday on the back of positive data from a potential coronavirus treatment from Gilead Sciences. Here's how the major averages performed:
- The Dow gained 532 points.
- The S&P 500 rose 2.66%.
- The Nasdaq gained 3.57%. https://t.co/Wxx7mKQUmb pic.twitter.com/WZwehGIVAI

8.38pm BST

Here's some reaction to the Federal Reserve's interest rate decision, and Jay Powell's press conference.

Powell acknowledged that the economic devastation has been a deliberate policy choice, and therefore the central bank must do whatever it takes to reduce the economic pain.

Certainly, Powell made a convincing attempt to reassure financial markets that the Fed will not look to tighten financial conditions prematurely just because equities are rallying....

Today the Fed acknowledged that the devil is in the details when it comes to injecting massive liquidity into the corporate sector. In the three weeks since announcing $2.3 trillion of liquidity through seven facilities, the Fed has only lent $8 billion through one of them, the Paycheck Protection Program Liquidity Facility.

The Fed's messaging makes it clear that while the Committee considers its current policy stance including the numerous lending programmes sufficient for now, they are ready to intervene further if needed. Given the extreme uncertainty about the outlook which largely depends on the virus trajectory with many moving parts - including any breakthroughs on therapeutic treatments, vaccines, testing and tracing technologies- it is hard to predict if or when the Fed will have to expand the scope of some of its programmes in the future.

But with the recovery likely to be sluggish and patchy, with social distancing measures potentially remaining in place for another 12-18 months, we think there will be a need for further action over the next few weeks - this would include increasing the size of some facilities, changing their terms as well as possibly creating new ones to provide assistance to specific sectors such as housing."

8.20pm BST

And finally... Jerome Powell assure his audience that the Fed is in no hurry to raise interest rates, and will be very patient.

8.15pm BST

Jerome Powell is then challenged about the moral hazard' issue -- isn't the Fed trying to keep asset prices up?

Powell insists that the Fed just wants to ensure markets are functioning properly... rather than seizing up.

Good questions about inflation & disconnect between markets/economy. Concerns about moral hazard? Powell notes downward pressure on inflation expectations & not expecting deflation despite low oil prices/headline inflation. As for markets, Powell just says he wants them to work.

8.11pm BST

On the other hand.....

Maybe some shade here from Powell? "Ideally you would go into an unexpected shock like this with a much stronger fiscal posture."

8.10pm BST

Fed chair Jerome Powell has brushed aside concerns that the US budget deficit is going to soar due to the cost of fighting the coronavirus pandemic.

Powell stirringly insists that the priority is to use the great fiscal power of the United States" to support the economy through the crisis.

Powell: NOW WITNESS THE POWER OF THIS FULLY ARMED AND OPERATIONAL BATTLE STATION

7.59pm BST

Jerome Powell cautions that there is even more uncertainty over the economic outlook than usual.

*POWELL: GDP REBOUND WON'T BRING U.S. BACK TO PRE-VIRUS LEVELS

7.54pm BST

Looking ahead, Jerome Powell warns that it will take some time" for US unemployment to return to more normal levels.

So the Fed is not in any hurry to withdraw its current support for the economy, he insists.

7.49pm BST

Here's a clip of Jerome Powell pledging to keep helping the US economy recover from the Covid-19 crisis.

The Fed will continue to use its lending powers forcefully, proactively and aggressively, until we're confident that we are solidly on the road to recovery," Fed Chair Powell says. https://t.co/MczAgV2GSG pic.twitter.com/5CnuWP7ZKC

7.47pm BST

Jay Powell is then challenged for not taking enough risks to help the US economy.

Q: Why is the Fed focusing its help on firms who they're confident can repay loans - surely they need help less?

Powell refers to the powers conferred on the Fed by Congress (in response to @steveliesman). Says you can't lend to insolvent companies. "These are lending powers. We do not make grants. We can't make grants."

7.42pm BST

Powell is now taking questions from America's economics reporters, on a video conference call.

Q: What more can the Federal Reserve to support the economy?

It may well be the case that the economy will need more support from all of us, if the recovery is to be a robust one.

7.39pm BST

Fed chair Jerome Powell also warns that the US economy will suffer an unprecedented' plunge in activity in the current quarter (having already shrunk by 4.8% per year in the last quarter).

Powell says the drop next quarter will be 'unprecedented' and the economic data has not yet caught up to the situation at hand

7.35pm BST

Federal Reserve chair Jerome Powell is holding a press conference now, to explain why the Fed left interest rates on hold.

He begins by focusing on the Covid-19 crisis and the tragic loss and tremendous hardship" being suffered by victims of the virus in America and across the globe.

7.08pm BST

Here's the key line from the Federal Reserve tonight:

The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.

In light of these developments, the Committee decided to maintain the target range for the federal funds rate at 0 to 1/4 percent.

7.05pm BST

Newsflash: America's central bank has voted to leave interest rates at their current record lows, and dropped a clear hint that they're not moving soon.

The Federal Reserve left its headline Fed Funds rate at 0%-0.25% -- maintaining its emergency rate cut of Sunday 15th March.

The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world. The virus and the measures taken to protect public health are inducing sharp declines in economic activity and a surge in job losses.

Weaker demand and significantly lower oil prices are holding down consumer price inflation. The disruptions to economic activity here and abroad have significantly affected financial conditions and have impaired the flow of credit to U.S. households and businesses.

BREAKING: Fed pledges to keep rates near zero until full employment, inflation come backhttps://t.co/ZsLurC2Op0 pic.twitter.com/IPdE5sy1RK

6.42pm BST

Here's our news story on today's markets rally:

6.17pm BST

Over at the White House, health advisor Dr. Anthony Fauci has told reporters that the latest tests of remdesivir on Covid-19 patience showed quite good news".

Fauci said he was told data from the trial showed a clear cut positive effect in diminishing time to recover."

Fauci said patients taking the drug usually took 11 days to recover, compared to 15 days in the placebo group. He said the mortality benefit of remdesivir has not yet reached statistical significance."

Dr. Fauci says early results of Gilead's coronavirus drug trial shows significant positive effect, suggests "a drug can block this virus" pic.twitter.com/kBnkAo76el

Treating coronavirus patients with the antiviral drug remdesivir showed no significant clinical benefits" in the first randomised trial of its kind, according to research released on Wednesday, AFP reports.

In a study among more than 200 Covid-19 patients in Wuhan, China, published in The Lancet, doctors found no positive effects of administering the drug compared with a control group of adults.

5.54pm BST

Bloomberg's John Authers has an interesting theory about the market rally.

He suspects that investors are piling back into riskier assets because they're less worried that they'll catch Covid-19 themselves, rather than really thinking about the wider economic damage being caused.

The rest of the week will have plenty of earnings announcements and central bank meetings to give rational reasons to buy or sell the market. Beyond that, the reduction in personal fear of the virus, and the unquestionable successes in holding it back, may have led to an irrational reduction in estimates of the economic damage.

Scientists in China suggest that Covid-19 could become a recurring seasonal disease; Singapore has been hit by a second wave of infections after apparently fighting off a first successfully; Germany has started to reopen its economy and already faces concerns that it has done so too soon. Production might be able to return to normal reasonably swiftly over the next few months - but surely consumption cannot be anywhere close to normal again until there is a vaccine. Or maybe I am just saying that because I live in a community where the problem is still severe.

'I fear that the market rally has been driven by people for whom the virus seems less immediate and close, and who have moved from excessive fear to over-optimistic forecasts that the disease will now disappear.' https://t.co/x0opUdUPsr by @johnauthers https://t.co/x0opUdUPsr pic.twitter.com/OF30AMrJBn

5.36pm BST

UK pub chain Wetherspoons has told the City tonight that it expects to keep its pubs closed until late June.

It made the prediction as it announced a new equity placing to raise 140m, to tide it through the lockdown.

The company is likely to make some changes to its operating model, assuming increased social distancing, and anticipates a gradual recovery in customer numbers.

Wetherspoon pubs are substantially larger than average, and most have outside facilities. The company believes these factors are likely to assist if social distancing measures apply.

While the govt refuse to discuss when and how a lockdown might happen, businesses are making their own plans

Wetherspoon's are planning to reopen their pubs and hotels 'in or around June'

5.26pm BST

A dozen European Union member states have called for a relaxation of air-passenger rights rules to help airlines deal with the economic fallout from coronavirus.

The goal shared by the European Union and its member states must now be to preserve the structure of the European air traffic market beyond the current crisis, while considering the interests and necessary protection of passengers.

The debate is ongoing so I am not now giving you the final word,"

5.19pm BST

The markets may be flying today, but the long-term cost of the pandemic will be very large.... something that is worrying politicians.

Mel Stride, the Conservative MP who chairs parliament's influential Treasury Select Committee, has warned today that there needs to be debate about who should bear the heaviest levels of additional taxation to support the economy, once the country emerges from lockdown.

The public finances will clearly be under significantly more pressure because there will be more debt that the economy is having to service and bear, there will be very difficult choices there around spending on the one hand and taxation on the other,"

5.11pm BST

Today's rally means the FTSE 100 has surged by over 20% since March 23, when it closed at just 4993 points.

That means the blue-chip index is back in Bull Market territory (defined as a fifth above a recent low).

5.00pm BST

Back on Wall Street, the Dow is up 2.3% or 549 points higher at 24,651 points.

Boeing is the top riser, up 8%, after it revealed plans to cut 10% of its workforce (see earlier post)

4.55pm BST

Newsflash: Britain's FTSE 100 has closed at a new seven-week high, lifted by optimism that the worst of the coronavirus crisis could be behind us soon.

The blue-chip index has ended the day up 156 points, or 2.6%, at 6115 points.

European stock markets higher as traders are optimistic that lockdowns could be loosened. Some countries have reopened small parts of their respective economies, and there is a general feeling in the markets that we are likely to see more of this in the months ahead. Traders are also bullish on stocks due to a report that showed some progress had been made in relation to a possible treatment for Covid-19.

It is understood that Gilead Science's antiviral drug, Remdesivir, showed positive data' in a trail. There has been some back and forth in relation to the drug in question, but for now the sentiment seems to be positive. The FTSE 100 and the DAX 30 both hit levels last seen in early March.

4.27pm BST

Oil is rallying hard, after the latest inventory figures showed a smaller rise in crude stocks than expected.

US crude oil inventories rose by 9 million barrels in the week to 24 April, the Energy Information Administration reports. Economists had expected a 10.6m rise.

#EIAReport is out!

For the week ending April 24th 2020, US commercial crude oil inventory rose by 10.136 million barrels but 1.148 million were transferred to the Strategic Petroleum Reserves, so the net effect is a build of 8.988 million.

Our forecast was +12.67M net. #OOTT pic.twitter.com/UhXHeTMjf0

3.47pm BST

Back in the UK, Royal Bank of Scotland is holding its AGM - virtually.

Speaking by video call, CEO Alison Rose flagged up the impact of the coronavirus on the bank, and the economy:

We will shortly release our Results for Q1, so you will understand that I am restricted in how much I can say about our financial performance so far this year. It's widely expected that the coronavirus pandemic will continue to have a serious impact on the economy, and consequently impact our performance, especially over the short-to-medium term.

Along with the Board, my executive team and I are actively managing against that disruption, ensuring we offer the support our customers need while maintaining a prudent approach to risk."

Off to the RBS AGM...and by that, I mean my kitchen pic.twitter.com/GqqvPV4y6b

My bad, Alison Rose playing a blinder pic.twitter.com/VdopdwidIU

3.33pm BST

Gilead's shares are up 4.6% today at $82.30 per share, following its announcement.

With the Nasdaq index now up 3%, Edward Moya of trading firm OANDA says traders are fixated on the remdesivir results.

The US recession is beginning, but financial markets seem to only care about Gilead's Remdesivir. Risk appetite is roaring back on news that positive data came out of the National Institute of Allergy and Infectious Diseases' (NIAID) study of the investigational antiviral remdesivir for the treatment of Covid-19.

Today's main event was not the Fed policy decision, nor that the US economy shrank by 4.8%, the sharpest pace since the Great Recession, but news that Gilead's anti-viral drug Remdesivir met the primary endpoint of a government run study to treat the COVID-19.

3.15pm BST

Astonishingly, America's slump into recession is partly due to a decline in heathcare spending - in the middle of a pandemic.

That's because many operations and procedures can't take place, either because hospitals are dealing with Covid-19 patients, or because physical distancing rules mean medics must stay away.

This is stunning: Nearly half of the Q1 decline in GDP can be attributed to healthcare, which is presumably delaying of elective procedures.

It's a strange reality that in the midst of a pandemic, we have a healthcare-led recession. pic.twitter.com/G3IezQkEzX

If you had told me we would have a massive pandemic I would have predicted an increase in health spending.

Shows why you shouldn't listen to me.

Health spending down 4.9% in Q1 (not annualized). Responsible for nearly 1/2 of the overall GDP decline. Likely down much more in Q2.

2.41pm BST

It appears that Gilead > GDP today.

Strong open for US #stocks, and for the right reason:
Good medical news (@GileadSciences treatment) overwhelms horrid Q-1 US GDP
Major indices are up 1.6-2.1%.
Interestingly, 10-year yield is still lower on the day, though only 1 bp.
Oil is stronger as the bad ETF technicals fade pic.twitter.com/QpdGnoa87x

.@Gilead is once again driving optimism on Wall Street about a potential #coronavirus treatment:

-Dow climbs 400 points, or 1.7%
- $GILD +6%https://t.co/9JDYhjlcJS #stocks

2.38pm BST

Stocks have jumped at the start of trading in New York.

Investors are focusing on the positive trial news about remdesivir's effects on Covid-19 patients, rather than the dire US GDP figures.

Stocks rise at the open after positive Gilead news lifts hope for coronavirus treatment https://t.co/zUHqXNpQMg pic.twitter.com/eNcguJORL3

2.26pm BST

Markets are shrugging off the looming US recession, and grasping onto hopes of a medical breakthrough for Covid-19 treatments.

US biopharmaceutical company Gilead has excited investors by announcing positive results from a trial of its antiviral drug remdesivir, to test if it could help severely ill COVID-19 patients.

These study results complement data from the placebo-controlled study of remdesivir conducted by the National Institute for Allergy and Infectious Diseases and help to determine the optimal duration of treatment with remdesivir.

The study demonstrates the potential for some patients to be treated with a 5-day regimen, which could significantly expand the number of patients who could be treated with our current supply of remdesivir.

Gilead announces results from Phase 3 trial of investigational antiviral in patients with severe COVID-19: https://t.co/lZFC5Yee8T. pic.twitter.com/oDyYCI7JDX

In an exploratory analysis, patients in the study who received remdesivir within 10 days of symptom onset had improved outcomes compared with those treated after more than 10 days of symptoms.

Pooling data across treatment arms, by Day 14, 62 percent of patients treated early were able to be discharged from the hospital, compared with 49 percent of patients who were treated late.

2.05pm BST

Bloomberg economist Michael McDonough has dug into the US GDP report:

(Everything wasn't down) The contribution to U.S. GDP growth of food & beverages purchased for off-premise consumption: pic.twitter.com/tMeESZ2qTi

Food services and accommodations, different story: pic.twitter.com/DSpyIZoAsm

Transportation services: pic.twitter.com/jljDrW9uYR

And since we aren't eating out, traveling or wearing pants at work the contribution of clothing and footwear was also a big drag on U.S. GDP pic.twitter.com/IdxnUHJGa8

2.03pm BST

Here's our US business editor Dominic Rushe on today's US GDP report:

The longest economic expansion in US history officially came to an end on Wednesday when the commerce department announced the economy shrank 4.8% in the first three months of the year.

The economic slump, the steepest since the last recession in 2008, is just an early indicator of how severely the coronavirus pandemic has mauled the US economy.

The US economy is in recession right now," said Gus Faucher, chief economist at PNC. We just don't know how deep."

1.59pm BST

Robert Alster, Head of Investment Services at wealth manager Close Brothers Asset Management, says the White House will not like today's GDP figures.

The US economy was performing well at the start of the year, but the coronavirus crisis derailed it in spectacular fashion. While the impact will be better seen in the Q2 data, Q1 figures act as a useful outrider, helping us understand the magnitude of the challenge ahead. In the past few weeks, more than 26 million Americans have applied for unemployment relief, and even White House advisers are admitting that the jobless total could reach 16% in the coming weeks.

This is not the economic record on which President Trump hoped to campaign for re-election.

1.52pm BST

The instant reaction to today's growth report is that America's economy is suffering, and it's about to get a lot worse.

Wall Street financier Steven Rattner fears that the slump will accelerate alarmingly in the current quarter, so that the economy shrinks at an annualised rate of 40%.

The first look at 1Q GDP, down 4.8%, marks the first decline in 6 years and the largest since 2009. But this is just the tip of the iceberg - forecasts for 2Q are in the neighborhood of -40%. pic.twitter.com/OLcQSoJHRz

Q1 GDP numbers are like the game in which you lose your star quarterback. Q2 GDP will be like the rest of the season.

Consumer spending was a 5.3 percentage point drag on QOQ GDP, its biggest drag since Q2 1980. https://t.co/fDatwd1ziy

1.47pm BST

America's longest economic expanse in history is over!

The contraction in the last quarter ends a record-breaking run of growth which began back in the summer of 2009.

1.45pm BST

America's economy shrank so sharply in the last quarter because personal spending fell, exports declined, and companies slashed investment.

The BEA explains:

The decrease in real GDP in the first quarter reflected negative contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, and private inventory investment that were partly offset by positive contributions from residential fixed investment, federal government spending, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased (table 2).

The decrease in PCE reflected decreases in services, led by health care, and goods, led by motor vehicles and parts. The decrease in nonresidential fixed investment primarily reflected a decrease in equipment, led by transportation equipment. The decrease in exports primarily reflected a decrease in services, led by travel.

1.39pm BST

NEWSFLASH: America's economy is contracting at the fastest rate since the financial crisis a decade ago, as the coronavirus lockdown hits activity

US GDP shrank at an annualised rate of -4.8% in January-March, new figures from the Bureau of Economic Analysis. That's worse than the 4.0% annualised contraction expected by economists.

The decline in first quarter GDP was, in part, due to the response to the spread of COVID-19, as governments issued stay-at-home" orders in March.

This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending.

BREAKING: US economy shrank by -4.8% in the first quarter -- the biggest decline since the Great Recession (GDP fell -8.4% in Q4 2008)

The worst is yet to come. Q2 2020 expect to be -35%

U.S. real GDP shrank at 4.8% annualized pace in 1st quarter, sharpest decline since 2008

12.58pm BST

Just in: Boeing has warned its staff that it plans to cut its headcount by 10%.

Boeing CEO tells employees company is reducing head count by roughly 10% pic.twitter.com/BxwkghE8MJ

12.45pm BST

Goldman Sachs isn't convinced by the stock market rally.

Its analysts have predicted that Wall Street will drop back towards last months lows, before rallying again later in the year.

Goldmans still committed to the strength in equities being a Bear Market Rally

SPX 3mth Target 2400 pic.twitter.com/lY6eSzZXe5

12.01pm BST

After an upbeat morning, the UK stock markets is still at a seven-week high as traders await the latest US GDP report in 90 minutes time.

In London, cruise operator Carnival (+10%), Barclays bank (+6.6%) and energy firm Centrica (+5.9%) are the top risers.

11.40am BST

AstraZeneca, Britain's biggest drugmaker, is involved in a number of initiatives to find a treatment for Covid-19.

11.21am BST

Shares in UK electricals chain Dixon Carphone have surged 20% this morning, after it showed it was getting to grips with the pandemic.

Dixons reported that its online sales have grown by 166% in the last five weeks, under the lockdown, as customers flock to buy home computers, gaming consoles and kitchen gadgets.

In April we have seen strong demand for home office equipment including computers and home networking as people work and communicate remotely.

Gaming and TV sales have also been strong. In kitchen products, refrigeration and food preparation including bread makers have sold particularly well.

Spoke to Dixons Carphone CEO Alex Baldock. DC has learned lessons from stores in Scandinavia, where shops have remained open, that would enable it to open a 'safe, zero contact store model' in UK 'as of next week'. Obviously they wont actually reopen until Govt go-ahead.

11.03am BST

European airline manufacturer Airbus has struck a very cautious note today, saying the travel industry may not recover until 2025.

Airbus CEO Guillaume Faury warned:

We are now in the midst of the gravest crisis the aerospace industry has ever known."

11.00am BST

Raffi Boyadjian, senior investment analyst at trading firm XM, says there is a mood of cautions optimism" in the markets today.

The rally in shares, and in oil, come as several countries began to ease their lockdown measures.

Hopes that shuttered businesses will soon be able to reopen their doors has sparked a relief rally in risk assets.

10.26am BST

Just in: Economic confidence across the eurozone has suffered its worst ever fall -- quite a contrast with the recent stock market rally.

The European Commission's economic sentiment index has slumped to just 67.0 points this month, down from 94.2 in March and 103.4 in February.

#Eurozone final April 2020 #consumer and #business confidence data.$EUR pic.twitter.com/JngCRi22eD

9.58am BST

The days of cramming thousands of bankers into skyscrapers may be numbered, due to Covid-19.

I think the notion of putting 7,000 people in a building may be a thing of the past. And we will find ways to operate with more distancing over a much longer period of time.

Working from home is clearly working rather well. Also, banks are no doubt looking at this and thinking they can cut costs by closing offices, call centres and branches.

Nevertheless, it highlights how bosses and government have a very hard task in exiting lockdown. Moreover, what about the Pret or the pub that depends on lunch trade from the City workers filling up these offices every day? The impact on the economy will be permanent.

9.52am BST

The oil price is recovering this morning too, helping to nudge stocks higher.

Brent crude has gained 3% to $21.07 per barrel, while US crude has gained 13% to $13.94 per barrel.

The FTSE 100 is outperforming its equivalents in Continental Europe thanks to a move higher in energy, banking and mining stocks.

The rebound in the oil market has helped Royal Dutch Shell plus BP. Well received earnings releases from a couple of big banks has boosted sentiment in London - the FTSE hit its highest level since early March. The rest of Europe is showing modest gains as dealers remain hopeful about the prospect of a further easing of social distancing guidelines.

9.36am BST

Hitting 6,000 points again is a significant milestone" in FTSE 100's recovery from the pandemic-inspired stock market slump, says Russ Mould, investment director at AJ Bell.

He gives some of the credit to Barclays, where decent investment bank trading made up for growing problems in the UK economy.

"Although Barclays has attracted flak for its commitment to investment banking, this part of the business is actually performing well at a time when the retail bank is facing a significant increase in bad debts.

The 2.1bn provision for this risk in the company's first quarter update reflects the fragility of the UK economy amid the lockdown, while big falls in revenue at advertising giant WPP offer an insight into the impact globally.

9.29am BST

Standard Chartered, the emerging markets-focused bank, has also reassured investors today despite reporting falling profits.

The FTSE 100-listed lender told the City that it sees signs of recovery in its key markets in Asia, predicting:

We expect a gradual recovery from the COVID-19 pandemic ... before the global economy moves out of recession in the latter part of 2020, most likely led and driven by markets in our footprint."

Standard Chartered sets aside US$956 million for bad loans, but beats analysts estimates, as banks prepare themselves to tackle the economic fallout from the coronavirus pandemic https://t.co/4MKpqacGBw

9.23am BST

Today's rally follows encouraging results from Google's parent company, Alphabet, last night.

Alphabet posted higher revenues in the last quarter than expected, despite a significant and sudden slowdown in advertising" in March.

9.15am BST

Roughly two-thirds of the companies on the FTSE 100 are up this morning, pushign the index over 6,000 points.

The rally is being led by energy companies (+2.1%), telecoms firms (+1.5%), financial stocks (+1%) and miners (+0.95%).

8.50am BST

Boom! Britain's FTSE 100 index has just pushed over the 6,000 points mark for the first time since 11 March.

That means it has clawed back all the losses since the stomach-churning crash on 12 March (the worst day since 1987).

8.42am BST

UK clothing and homeware group Next has reported that sales plunged over 40% in the last quarter, due to the lockdown.

We believe that the threat of a pandemic did not significantly affect retail sales until the beginning of March, we saw a material impact in the second week of March and declines accelerated as each day went by.

In the three days before stores closed on Monday 23^rd March, Retail sales were down -86%. In reality, the majority of our customers had decided to stop shopping in retail stores before the order came to close them.

8.32am BST

The coronavirus crisis is bad news for the advertising industry too.

The second quarter is going to be tough and logic would tell you that we had a partial impact in March and we'll start to see the full impact around the world in the second quarter."

8.27am BST

The rising economic cost of Covid-19 has hit profits at UK bank Barclays.

The impact of COVID-19 came late in what was until that point a good quarter. Statutory profit before tax was 0.9bn and profit before tax excluding credit impairment charges was 3.0bn. We have taken a 2.1bn credit impairment charge which reflects our initial estimates of the impact of the COVID-19 pandemic.

Given the uncertainty around the developing economic downturn and low interest rate environment, 2020 is expected to be challenging,"

8.17am BST

IAG are the top faller in London, down almost 6%, after its British Airways division announced it would eliminate one in four jobs.

Job cuts often go down well in the City (they're a pragmatic lot). Not today, though.

One thing seems certain, while last night's actions by IAG have attracted some significant criticism in terms of their timing, they also point to the challenges facing the travel sector in the weeks and months ahead.

Will demand have picked up again, and if not, will airlines have to reconfigure cabins so that passengers aren't crammed in on top of each other. Will air fares become more expensive, as a result of lower capacity, and will package holidays be less popular as a result.

8.09am BST

The FTSE 100 has hit a new seven-week high at the start of trading in London.

The blue-chip index has gained 30 points to reach 5989 points, for the first time since Wednesday 11 March.

7.57am BST

April has been a good month for Wall Street. With two days to go, stocks are up 10% - their best performance for many a year (after a torrid March).

*MONDAY'S GAINS PUT THE S&P 500 ON PACE FOR ITS BIGGEST ONE-MONTH GAIN SINCE 1987, WITH AN 11.4% SURGE IN APRIL.

*THE DOW IS UP 10.1% MONTH-TO-DATE, WHICH WOULD BE ITS BEST MONTHLY PERFORMANCE SINCE 2002.

*THE NASDAQ IS UP 13.1% IN APRIL, ITS LARGEST MONTHLY JUMP SINCE 2002 pic.twitter.com/pEJOinAAJ6

7.48am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The Fed is being sent on a mission to places it has never been before."Jay Powell is redefining what it means to be a central bank. https://t.co/5UpLjeVzYh via @WSJ pic.twitter.com/zUXCCRCy8d

Live Market Update from the CMC dealing desk - European Opening Calls:#FTSE 5970.97 0.21%#DAX 10810.71 0.14%#CAC 4577.94 0.18%#IBEX 6832.97 -0.05%
Prices are indicative only. $FTSE $DAX $CAC $IBEX

There are still many unknowns, perhaps too many to justify the return to a bull markets for many bourses across the globe. The true scale of the economic impact of the coronavirus is still unknown. Whilst people returning to work and economies reopening is a good thing, there is a good chance that the rally will start to stall over the coming weeks, as investors are faced with the stark reality of the hard data whilst also waiting to see if the gradual reopening are working.

Investors face the same conundrum as governments; will the reopening prove successful or lead back to a second wave of infections?

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