Wall Street futures point to a higher open after a turbulent start to the week.
U.S. stock futures rallied and global markets rose on Tuesday, rebounding from days of selling as investors appeared encouraged by moves in Washington to stabilize America’s stricken economy.
Futures for the major U.S. benchmarks surged before the start of regular trading, hitting their upper trading limit of 5 percent, as lawmakers signaled they were nearing a deal for a $1.8 trillion economic stimulus package that would bail out companies and send checks of up to $1,200 to Americans.
The gains came even as investors were faced with more evidence of the economic toll of the outbreak. Companies, from General Motors to the Boeing supplier Spirit AeroSystems, detailed the impact of production shut downs on their business, and new survey of activity in Europe showed a plunge in business across the region.
But Tuesday’s rally was in part a rebound from a difficult stretch for stock investors. On Monday, the S&P 500 fell about 3 percent as Congress struggled to overcome differences on the aid bill and traders remained cautious about the Federal Reserve’s ability to cushion an economy in free-fall. Stocks are down more than 30 percent since their peak in February.
In Europe, markets were led on Tuesday by a nearly 6 percent surge in Germany. The gains followed a similar performance in Asia, where major markets around the region posted increases that ranked among their biggest gains in weeks.
Other markets signaled improved investor confidence. Prices for futures based on the United States benchmark oil rose 4 percent. The price of the 10-year Treasury bond fell, sending yields higher.
Global airlines could lose more than $250 billion.
Global airline revenues are on track to be $252 billion lower this year than in 2019, representing the worst economic crisis in the history of aviation, the International Air Transport Association said on Tuesday.
That figure is more than double the worst-case scenario the industry group laid out earlier this month.
Without immediate aid from governments around the world, almost half of the airlines around the world could die “in the coming weeks,” Alexandre de Juniac, the group’s chief executive, said in a call with reporters on Tuesday.
“We clearly need massive action very quickly, urgently,” he said.
The industry has suffered immense losses in two waves in recent weeks, first by declining demand as fear over the outbreak spread and then by flight restrictions imposed by governments around the world, effectively shutting down much of the industry.
Carriers in the United States are better positioned than other airlines around the world, but none have been immune to the effects of the steep industry downturn.
Report shows economic activity plummeting in Europe.
Business activity in the eurozone plunged in March at unprecedented rates, according to surveys by IHS Markit.
Provisional data for the countries using the euro showed that business activity collapsed, with the composite Purchasing Managers Index dropping to 31.4 points in March from 51.6 in February, the biggest monthly fall since data collection started in 1998. Numbers over 50 indicate an increase in activity and numbers below indicate a drop.
“Business activity across the eurozone collapsed in March to an extent far exceeding that seen even at the height of the global financial crisis,” said Chris Williamson, the chief business economist at IHS Markit. He added that “there’s scope for the downturn to intensify further” if stricter lockdowns were to be put in place to deal with the virus.
What’s next for SoftBank?
SoftBank’s share price jumped by 19 percent in Tokyo on Tuesday after news that the company will sell up to $41 billion in assets to buy back $18 billion in stock and pay down debt. But as today’s DealBook newsletter asks, what’s next for the Japanese conglomerate?
SoftBank is selling assets in a chaotic market, potentially fetching poor prices. But provided it can raise the money, depressed asset values also allow it to buy back its own shares at a significant discount to their sum-of-the-parts valuation. Investors are happy with the trade-off, DealBook hears. The move suggests, however, a more defensive posture for the company known for ambitious deal-making, albeit in companies like Uber, WeWork and Oyo that are now vulnerable to the coronavirus-driven economic downturn.
Toyota suspends some production, citing lowered demand.
The Japanese automaker Toyota plans to suspend production at five of its plants in Japan because of “the condition of overseas markets and demand,” the company said in a statement on Monday.
Toyota said it will pause seven of its vehicle production lines for two to nine days beginning on April 3.
Separately, the company said on Sunday that two factory workers at a plant in the central Japanese prefecture of Aichi have tested positive for the coronavirus, adding that it has temporarily closed…
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