Safe-haven assets including the dollar and government bonds were little changed, reflecting an unsettled market weighed down by concerns about containing the coronavirus outbreak and jobs data in the United States that was worse than expected. “It’s a hope-based rally rather than an evidence-based rally,” said Anthony Doyle, cross-asset specialist at fund manager Fidelity International in Sydney. There were still worries about a second wave of infections, Doyle said, adding that huge piles of cash waiting to go back into the markets suggest investors remained nervous.
MSCI’s gauge of stocks across the globe .MIWD00000PUS shed 0.79 percent following broad losses in Europe and gains in Asia that pushed Japan’s Nikkei .N225 to a seven-week high.
The index gained 10.5 percent in April, its best month since an 11.3 percent gain in April 2009 as the markets were recovering from the 2008 financial crisis.
On Wall Street, the Dow Jones Industrial Average .DJI fell 288.14 points, or 1.17 percent, to 24,345.72, the S&P 500 .SPX lost 27.08 points, or 0.92 percent, to 2,912.43 and the Nasdaq Composite .IXIC dropped 25.16 points, or 0.28 percent, to 8,889.55.
“We have gone back to a turbocharged version of the great financial crisis,” said Simon Fennell, a portfolio manager in William Blair’s global equity team, referring to how markets have surged on mass central bank and government stimulus.
6.11am update: Trump threatens new tariffs on China in retaliation for coronavirus
US President Donald Trump said on Thursday his hard-fought trade deal with China was now of secondary importance to the coronavirus pandemic and he threatened new tariffs on Beijing, as his administration crafted retaliatory measures over the outbreak.
Trump’s sharpened rhetoric against China reflected his growing frustration with Beijing over the pandemic, which has cost tens of thousands of lives in the United States alone, sparked an economic contraction and threatened his chances of re-election in November.
Two US officials, speaking on condition of anonymity, said a range of options against China were under discussion, but cautioned that efforts were in the early stages. Recommendations have not yet reached the level of Trump’s top national security team or the president, one official told Reuters.
“There is a discussion as to how hard to hit China and how to calibrate it properly,” one of the sources said as Washington walks a tightrope in its ties with Beijing while it imports personal protection equipment (PPE) from there and is wary of harming a sensitive trade deal.
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