As America's fractured Congress inches closer to an agreement on a comprehensive bailout for the economic hardships businesses and workers are facing due to the COVID-19 pandemic, stocks are poised for a big rally on Wall Street.
The move is more than welcome after stock markets yesterday recorded their worst day in over 30 years.
All the major indices (and bitcoin) were up in pre-market trading the morning after Treasury Secretary Steve Mnuchin and Speaker of the House Nancy Pelosi said that Republican and Democratic leadership had a deal in place to move forward with a financial stimulus package to support businesses hit by the coronavirus outbreak.
At the open markets went up:
- The Dow Jones was up 1,301.20, or 6.14%, to 22,501.82 at the open
- The Nasdaq was up 391.93 points, or 5.44%, to 7,593.73 at the open
- The S&P 500 was up 139.54 points, or 5.63%, to 2,620.18 at the open
In addition to the federal government's agreement with congressional leadership to make it rain, the agencies tasked with overseeing the nation's health are moving forward quickly to bring new testing capabilities online in an effort to get a clearer picture of the spread of the novel coronavirus in the U.S.
-- THE FDA will create an around-the-clock hotline for labs if they can’t get authorized tests, need to process tests or have issues validating a test.
— Jake Sherman (@JakeSherman) March 13, 2020
It's a clutch of good news for people who don't like bad news, and there's been a lot of bad news lately. The seeds of a potentially more coordinated government response have borne fruit in a brighter outlook for tech darlings like Apple, which was up 7.45% or $18.49 per-share in pre-market trading. Tesla shares were up 7.75% at the market open to $604.01 per share. Microsoft is up over 7% as well.
Not all damage is set to be undone, however. At its current open, the Nasdaq is still off about 22%, leaving it not only far from recovered, but still firmly encamped in bear-market territory.
Similarly, bitcoin's modest rally in the past half day is not a full recovery. This morning's trading leaves the price of the most famous cryptocurrency down a little less than 50% from recent highs (bitcoin traded for more than $10,000 in mid-February). Other cryptos remain hard-hit, with XRP down more than 50% from its February highs, and Ethereum down a similar percent over the same time frame.
But still, the day's positive news is welcome. Hard-hit companies like Uber and Lyft are up sharply, providing some balm to investors who had wagered on recent technology IPOs. More when the markets close, of course, but keep an extra close eye on Slack, which fell after-hours yesterday when its earnings report failed to excite investors. This morning, however, it appears to have pared those declines.