US markets soared on Tuesday amid growing optimism that the US Congress will agree on a fiscal stimulus package aimed at fighting the economic impact of the current virus pandemic. The Dow surged 2,112.98 points, or 11.37 percent, to 20,704.91, with the S&P 500 index shooting up 209.93 points, or 9.38 percent, to 2,447.33. The Nasdaq Composite index climbed 557.18 points, or 8.12 percent, to close the session at 7,417.86.
European stocks also climbed after tentative signs that the coronavirus spread is slowing in Italy. The pan-European Stoxx 600 index soared more than 8.4 percent with Germany’s DAX climbing more than 10 percent. Italy’s FTSE MIB and the UK’s FTSE 100 both climbed 9 percent.
Maltese markets meanwhile slipped lower with the MSE Equity Total Return Index closing down 0.555 percent at 7,579.978 points. PG plc led the losses with shares down 5.71 percent at €1.65, followed by Bank of Valletta Plc which lost 4.44 percent to €0.86. Malta International Airport Plc meanwhile led the gains with shares shooting up 18.18 percent to €4.16.
US strikes deal on stimulus
The Trump administration struck a deal with Senate Democrats and Republicans on an historic rescue package that tees up more than $2 trillion in spending and tax breaks to bolster the hobbled U.S. economy and fund a nationwide effort to stem the coronavirus. Senate Democratic leader Chuck Schumer called it an “outstanding agreement.”
The legislation was still being drafted but Senate Majority Leader Mitch McConnell said the Senate would vote on it Wednesday. The plan includes about $500 billion that can be used to back loans and assistance to companies, including $50 billion for loans to U.S. airlines, as well as state and local governments. It also has more than $350 billion to aid small businesses. Then there is $150 billion for hospitals and other health-care providers for equipment and supplies.
The proposed package would still have to pass in the House before it gets to President Donald Trump’s desk. The size of the stimulus package is unprecedented, dwarfing the approximately $800 billion Obama stimulus that passed five months after the 2008 financial crash and would likely more than double a US budget deficit that was already set to hit $1 trillion this year before the coronavirus outbreak.
This article was issued by Peter Petrov, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.