The S&P/ASX 200 Index (ASX: XJO) is currently up more than 2%, though it was up even more earlier today.
In an extraordinary session overnight, the S&P 500 Index (INX) rose by 9.4%. There were a couple of things that may have caught investor attention. The infection growth in Italy is levelling off and US President Donald Trump said he hoped that the US will have shaken off the coronavirus by Easter.
A rise of 9.4% in one day is an enormous shift in market sentiment.
When you look back at the GFC there was a bit of a lag between the lowest point of the share market in the US and the highest level of unemployment. It was after government action around March 2009 along with some other positive news that saw the US share market rebound and then it never looked back. Have we reached that point? Only time will tell.
Could the same be about to happen in the US? The US is trying to pass a government stimulus package and the Federal Reserve has said it will buy an unlimited amount of US treasury bonds and mortgage-backed securities to support the US economy. That's an enormous step.
The Australian government has also stepped in with a large amount of support for various segments of society including people without a job, smaller businesses that employ people and the elderly.
There are some shares that are reacting strongly (in a good way) today including the Afterpay Ltd (ASX: APT) share price which is up 31.1%, the Qantas Airways Limited (ASX: QAN) share price is up 17.75%, the Scentre Group (ASX: SCG) share price is up 17.5% and the Magellan Financial Group Ltd (ASX: MFG) share price is up 17%.
The sooner this virus can be brought under control the better, hopefully life can return to normal fairly soon after that. The market is certainly feeling more positive today. But who knows what will happen tomorrow?
