The Dow surged some 1440 points in the final half hour.
The S&P 500 rose 9.3%; the Nasdaq gained 9.4%.
Key to sustaining the market’s renewed optimism could be the outcome of a conference call among the G7 leaders on Monday; the exact time wasn’t yet known. And the US central bank policy meeting on March 17-18.
The yield on the US 10-year note leapt 16 basis points to 0.96% as of 4.59pm New York time. It fell to a record low below 0.4% earlier this week.
ASX futures were up 61 points or 1.1% to 56558 near 8am AEDT.
The Australian dollar was having a particularly tough time; it fell as low as US61.24¢. Near 8am AEDT, it was down 0.5% to US62.03¢.
The Bank of Canada, in a move coordinated with a fiscal boost from the Canadian government, slashed its key rate by 50 basis points – that’s the second 50bps cut this month.
“The Bank of Canada is taking concerted action to support the Canadian economy during this period of economic stress,” governor Stephen Poloz said. “The Banks Governing Council stands ready to do what is required to support economic growth and keep inflation on target, and we will continue to ensure that the Canadian financial system has sufficient liquidity.”
The Bank of Canada move came hours after central banks in Norway and Sweden detailed measures to bolster liquidity in their respective markets.
A key reason for the rebound in US assets was an expectation that President Donald Trump – after days of dithering – would declare the outbreak of the coronavirus a national emergency. He did.
As of Friday evening in New York, there have been at least 2110 cases of coronavirus confirmed by lab tests and 48 deaths, according to a New York Times database.
Mr Trump reportedly had been resisting an emergency declaration in part because he was keen to downplay the impact the virus would have on the US, and potentially on his 2020 presidential re-election campaign.
At the start of the day, AGF strategist Greg Valliere, who often has applauded the Trump administration’s pro-business policies, said investors were “stunned” by President Trump’s speech to the nation earlier this week.
“When the history of this shocking collapse is written, its defining chapter may focus on Donald Trumps appalling speech on Wednesday night poorly delivered, filled with errors, insulting to European allies, and a disaster for the financial markets.”
After earlier forecasting a Trump election win in November, Mr Valliere said Democrat Joe Biden is now the clear favourite. “If Biden can get through Sunday nights debate [with Bernie Sanders] relatively unscathed, a consensus will grow that hes the general election front-runner.
“Trumps hard-core supporters will resist that narrative, but many of them still believe the virus is a media hoax; Trump cant win in November with only one-third of the electorate.”
Investors are positioning for an at least 50 basis point interest rate cut by the Federal Reserve when its policymakers meet next week. Some are betting the Fed will cut 100bps.
ASX futures up 61 points or 1.1% to 5655
- AUD -0.5% to 62.03 US cents
- On Wall St: Dow +9.4% S&P 500 +9.3% Nasdaq +9.4%
- In New York: BHP +10.9% Rio +13% Atlassian +2.3%
- In Europe: Stoxx 50 +1.6% FTSE +2.5% CAC +1.8% DAX +0.8%
- Nikkei 225 futures +6.7% Hang Seng futures -0.6%
- Spot gold -2.9% to $US1529.83 an ounce in New York
- Brent crude +1.9% to $US33.85 a barrel
- US oil +0.7% to $US31.73 a barrel
- Iron ore +1.1% to $US91.71 a tonne
- Dalian iron ore +2.9% to 676.5 yuan
- LME aluminium +1.4% to $US1680 a tonne
- LME copper +0.4% to $US5460 per tonne
- 2-year yield: US 0.49% Australia 0.54%
- 5-year yield: US 0.72% Australia 0.57%
- 10-year yield: US 0.96% Australia 0.95% Germany -0.55%