US stocks closed higher on Tuesday amid decent gains in technology stocks, headlined by Microsoft and Apple. The S&P 500 index rose 3.1%, the Dow Jones Industrial Average gained 2.4% while the Nasdaq rallied nearly 4%. Investors were also optimistic that the administration of United States President Donald Trump may soon ease coronavirus-fueled lockdowns. On the other side, JPMorgan and Wells Fargo revealed worrying earnings reports. JPMorgan Chase said that its first-quarter profits plunged by around 70%. Meanwhile, Johnson & Johnson reported better-than-expected first-quarter earnings but cut its outlook for the year.
Today in Asia, stocks turned negative after the International Monetary Fund said the global economy will suffer its worst year since the Great Depression of the 1930s due to the coronavirus outbreak. According to the IMF’s latest forecast, global economic output will shrink by 3% this year. The Shanghai Composite Index lost nearly 0.6% and the Nikkei 225 in Tokyo finished 0.455 lower, Hong Kong’s Hang Seng edged 1.18% lower while the S&P-ASX 200 lost 0.5%.
European stock markets fell on Wednesday as well after gloomy predictions from the IMF and despite the fact that several countries have started to tentatively lift restrictions on public life and businesses. Meanwhile, the German government reportedly plans to extend lockdown measures until May 3. The U.K. and France are also looking to extend lockdown measures into early May.
Elsewhere, dollar demand is picking up gradually after yesterday’s decline to two-week lows. EURUSD was rejected from 1.0990 and got back below the 50-DMA, threatening the 1.09 handle again. GBPUSD has encountered resistance at the 200-DMA and is ready to dive under 1.25. USDJPY refreshed early-April lows below 107.00 earlier in the day and turned slightly positive but the recovery momentum is too modest amid demand for the safe-haven Japanese yen ahead of the US retail sales data due later today.
Meanwhile, Brent crude is back below $30 after failed attempts to cling to the $32 handle. Moreover, the prices briefly dipped under $28 on Wednesday, suggesting the selling pressure may persist in the near term, as traders continue to digest the IMF’s gloomy projections. Now, the market focus shifts to the IEA monthly report and the weekly data from the EIA.
