By Geoffrey Smith
Investing.com – European stock markets opened higher on Tuesday, but with less vigor than US markets showed on Monday, in hopes of coordinated political action by governments and central banks to support the Mondial economy.
On Monday, central banks from Japan to Europe followed the Federal Reserve to express their intention to ensure that the financial markets have sufficient liquidity and are not destabilized by panic. However, the fear remains that the central bank’s action is not enough to prevent the coronavirus from hampering the world economy.
Markets are expected to focus on the results of a Tuesday night teleconference between G7 finance ministers and central bank governors to discuss the coronavirus and its implications. Reuters said there would be no announcement of concrete and coordinated stimulus packages to support the economy.
At 3:10 a.m.ET (0810 GMT), the benchmark Euro Stoxx 600 was up 6.2 points or 1.7% to 382.30, while the German Dax was up 1.5% and the British FTSE 100 of 1.6%. In Italy, where the worst Covid-19 epidemic in Europe is to date, the FTSE MIB increased by 1.7%.
While President Donald Trump has again criticized the Federal Reserve for not cutting rates overnight, many others warn that rate cuts alone will not stop the virus from hitting the global economy . The Organization for Economic Cooperation and Development cut its global growth forecast to 2.4% on Monday, the lowest since 2009.
“The virus poses particular risks to the global economy as it creates a shock to both the supply and demand for goods and services,” said Guy Monson, chief investment officer at Sarasin & Partners in comments by email. “A demand shock alone can be mitigated by lower interest rates and support from the central bank. However, if the workforce is quarantined, critical supplies become unavailable and public gatherings are limited, the impact of rate cuts will be at best mitigated. “
There was little important news to report. Among the few companies to release updates, the German consumer group Beiersdorf (DE: BEIG), the maker of Nivea, warned that it was impossible to estimate the impact of the virus on businesses in 2020 and, therefore, did not take it into account in the forecast. for organic sales growth of 3% to 5%.
European equities up 2% on recovery hopes“data-reactid =” 21 “> European equities increase by 2% on hopes for recovery
I & amp; J ordered to pay $ 1.7 million to three Australian women in a pelvic mesh class action“data-reactid =” 22 “> J&J ordered to pay $ 1.7 million to three Australian women in a pelvic mesh class action
Swiss Re appoints CEO of UBS Ermotti to become President in 2021“data-reactid =” 23 “> Swiss Re aligns the CEO of UBS Ermotti to become president in 2021