Futures contracts tied to the major U.S. stock indexes rose early Tuesday morning as a Bloomberg report said President Donald Trump’s administration is preparing a $1 trillion infrastructure proposal.
Dow Jones Industrial Average futures rose 308 points, suggesting an open gain of more than 350 points when regular trading resumes on Tuesday. S&P 500 and Nasdaq-100 futures also implied a positive Tuesday start for the two indexes.
Citing people familiar with the plan, Bloomberg reported the Trump administration is drawing up a $1 trillion infrastructure proposal. The report said a preliminary version being prepared would set aside majority of the money for traditional infrastructure such as roads and bridges, though funds would also be reserved for 5G wireless infrastructure and rural broadband.
· Global stocks jump on Fed support, easing second wave fears
Asian shares rallied and the dollar fell on Tuesday as risk appetite was bolstered by the formal start of the Federal Reserve’s corporate bond buying programme, and earlier worries about a second wave of coronavirus infections eased.
Improving sentiment also pushed up Wall Street futures with e-Minis for the S&P 500 rising 1.6% following a late U.S. stocks rally on Monday. Treasury yields rose and the yield curve steepened.
The Fed said it will start purchasing corporate bonds on Tuesday in the secondary market, one of several emergency facilities launched in the wake of the coronavirus pandemic.
A flood of liquidity in the form of fiscal and economic stimulus, along with uneven but steady re-openings of state and local economies, sparked a sharp rally in the stock market since its late-March trough.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 3.2%, its biggest one-day gain since March 25. Australian stocks rose 4.4%, while shares in China rose 1.2%.
Sentiment in Asia was also helped by data showing there were 27 new coronavirus cases in Beijing, down from 36 new cases the previous day. Beijing banned high-risk people from leaving the capital to stop the spread of a fresh outbreak.
But some analysts were not convinced about the strength of the gaining momentum.
· Japanese stocks surge on central bank boosts, U.S. stimulus hopes
Japanese stocks jumped on Tuesday, with the Nikkei gaining the most in nearly three months, after central banks in the United States and Japan offered measures to support corporate finances.
Sentiment was also boosted by a Bloomberg report that U.S. President Donald Trump was preparing a nearly $1 trillion infrastructure proposal to bolster the U.S. economy.
The benchmark Nikkei average advanced 4.88% to 22,582.21 , its biggest daily gain since March 25.
· China shares close higher on hopes of outbreak control, U.S.-China talks
China shares ended higher on Tuesday, with sentiment lifted by confidence in Beijing’s capability to control the latest resurgence of coronavirus cases and expectations of bilateral Sino-U.S. talks.
At the close, the Shanghai Composite index was up 1.44% at 2,931.75, posting its biggest daily gain in more than two weeks.
· European markets rise sharply after U.S. rally on Fed’s additional support; Stoxx 600 up 2%
European stocks advanced on Tuesday as investors reacted to the U.S. Federal Reserve’s latest announcement and focus on central bank action around the world.
The pan-European Stoxx 600 jumped 2.1% in early trade, travel and leisure stocks surging 4.7% to lead gains as all sectors and major bourses entered positive territory.
Investors on Tuesday will be focused on central bank announcements, particularly after the Fed announced Monday more measures to support the market.
Reference: Reuters, CNBC
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