[Good Morning Stock Market] The Direction of the Global Stock Market... Depends on the Spread of COVID-19

[Image source=Yonhap News]

[Asia Economy Reporter Jihwan Park] The U.S. stock market, which had risen more than 3% the previous day, closed down by over 1%. On the 31st local time, the Dow Jones Industrial Average closed at 21,917.16, down 1.84%. The S&P 500 and Nasdaq also fell by 1.60% and 0.95%, respectively. During the session, news of a sharp increase in new coronavirus (COVID-19) cases caused the market to give up all gains by the close. The global number of COVID-19 cases has surpassed 800,000. Among these, the U.S. cases have approached 180,000, with the death toll reaching 3,178. Experts believe that the direction of the global stock market will depend on whether major countries, including the U.S., can contain the spread of COVID-19.

◆ Sangyoung Seo, Kiwoom Securities Researcher=The U.S. stock market rose more than 1% during the session, supported by decent economic indicators and President Trump's mention of a $2 trillion infrastructure bill. However, after the New York governor stated that no one knows when the emergency status for COVID-19 will end, uncertainty emerged, leading to a reversal into a decline.

Regarding the domestic stock market, the day before, just before the quarter-end close, foreign investors' net selling sharply decreased, expanding the gain by more than 2% and closing higher. However, considering the sharp increase in COVID-19 cases in the U.S. and Europe, ongoing concerns about economic recession due to U.S. employment instability, and that the previous day's rise was driven by quarter-end supply-demand factors, it is expected that the domestic market may see some pullback today.

◆ Jaehyun Kang, Hyundai Motor Securities Researcher=Among major countries, China was the first to experience the spread of COVID-19 and also the first to see a slowdown in its spread. Therefore, how quickly China's economy recovers is an important factor in estimating the normalization timing of countries currently experiencing COVID-19 spread, such as the U.S. and the Eurozone.

Since March, China's daily new confirmed cases have sharply decreased to below 100, and with the partial lifting of 'social distancing,' economic activities have begun to normalize. Thus, the March manufacturing PMI for China was expected to rebound significantly to around 45.0 compared to the previous month. However, the actual figure was much higher at 52.0, a level comparable to just before the escalation of the 2018 U.S.-China trade dispute.

This confirms that in the real economy, resolving the COVID-19 crisis itself is more important than the implementation of stimulus measures.

This content was produced with the assistance of AI translation services.