The sell-off in US and European markets lost pace despite less than ideal economic data, with major indices closing the day on a positive note.
Nasdaq (+1.66%) stood out again, as demand in technology stocks remained strong. Biotech jumped 4.4% in after-trading hours, as Gilead, an
American biotech company, said it may have found an efficient drug to treat coronavirus.
On the data deck, news was mixed.
Additional 5 million Americans applied for jobless claims last week, but the latest number was a touch less than expected and lower than the
past weeks’. The Philly Fed manufacturing index on the other hand tanked to a rock-bottom low, hinting that the business sentiment is
clearly deteriorating, and the data will certainly get worse in April before it starts getting better.
In Japan, the industrial
production unexpectedly declined 0.3% in February.
The most-dreaded Chinese GDP came in at -6.8% in the first quarter, a first
contraction on record since data collection began in 1992. The expectation was a 6.2% contraction, versus a 6% advance in the fourth quarter
of last year.
Now, of course, if we compare this number with the expectation of over 30% slump in developed economies following a
similar shutdown and confinement period, it is possible that there may have been some adjustment on data, and the data doesn’t reflect the
real extent of the economic calamity.
Other data showed that the slump in Chinese retail sales didn’t improve as much as expected in
March, down from -20.5% to -15.8% versus -10% penciled; the fixed asset investment fell 16.1% y-o-y against -15.0% forecasted by analysts
and -24.5% printed a month earlier. But, the contraction in the industrial production was only 1.1% in March, versus-7.3% expected by
analysts and -13.5% printed month earlier, meaning that the Chinese production picked up at a better-than-expected speed, which is little
surprising for Xi’s ambitious economy.
Both ways, investors are happy with the latest Chinese data, and Asian markets are up with
CSI 300 (+1.23%), Shanghai’s Composite (+0.89%) and Hang Seng (+2.31%) preparing to close the week in the green.
The US dollar
climbed above the 100 mark on Thursday, then eased below this level with improved global risk appetite. Meanwhile US treasuries remained
bid and the US 10-year yield settled below the 0.70% level.
By Ipek Ozkardeskaya
