The European stock exchanges had not experienced such a session since the end of March. After a week marked by doubts about the intensity of the economic recovery, the indices rebounded strongly on Monday.
The rise accelerated, after the opening of Wall Street, with the announcement of encouraging results for a new vaccine. The CAC 40 rose 5.16% and ended the session close to 4,500 points. Euro STOXX 50 also gained 5.1%. As for the German DAX, the largest increase in Europe, it has rebounded by 5.67% and has lost only 16.5% since the start of the year. In New York, the Dow Jones and the S&P 500 took more than 3% and the Nasdaq more than 2%, at the end of the European session.
The correction phases continue to be seen as opportunities for repositioning on the world stock markets. Last week, the indices had recorded losses of between 3 and 6% in Europe. Wall Street had also been disturbed by contrasting indicators and a renewed tension between the United States and China: the Dow Jones had yielded 2.1% and the Nasdaq 1.2%.
Hope for a coronavirus vaccine
The announcement by the American laboratory Moderna of encouraging preliminary results for clinical trials (on a small number of volunteers) on a vaccine against the coronavirus created a wind of euphoria. This vaccine, mRNA-1273, has elicited an immune response of the same magnitude as that seen during natural contamination by the virus, according to a laboratory statement. Phase 2, on a larger number of people, should start soon. According to Moderna, phase 3, the last and most important to validate the effectiveness of the vaccine, should start in July.
Investors also welcomed comments made by Jerome Powell, chairman of the Federal Reserve, in an interview aired on CBS on Sunday. He reaffirmed the determination of the Fed to increase its support if necessary and felt that the current crisis presented “Fundamental differences” with the Great Depression. Unlike 1929, all indicators of the American economy were in the green before the pandemic, he recalled. The head of the Fed has estimated that the unemployment rate could reach 20 to 25% in the United States and that the GDP could drop to 30% in the second quarter.
These comments are in addition to new deconfinement measures in several countries, such as Spain, Italy or France, which reinforce the scenario of a gradual return to growth. Another reason for hope for investors: Angela Merkel and Emmanuel Macron jointly proposed the creation of a European stimulus fund endowed with 500 billion euros.
Rising oil
Already at the start of the day, the strong appreciation of North American oil prices, which crossed the 30 dollar mark for the first time in two months, had rocked the markets in “risk on” mode. A welcome increase, even if it is more linked to the fall in production than to a return to demand. The number of active wells in the United States fell for the ninth week in a row, to levels not seen in more than a decade, while stocks at the key storage center in Cushing, Oklahoma, fell for the first time since late February.
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