The S&P/ASX 200 Index (ASX: XJO) has gone up two days in a row. Can the ASX 200 make it a hattrick of rises?
Over Tuesday and Wednesday the ASX 200 gained rose almost 10%. Of course, it's down significantly, it's still 30% lower than its record on 20 February 2020.
The ASX 200 is rising on the hope that the US rescue package will be enough to stop the market falling any further. The US is the biggest part of the global economy, if it isn't hard hit then the rest of the world will be in a better position.
What's in the US rescue package?
The US President and the Senate have agreed a huge package worth US$1.8 trillion. This equates to about 10% of the US economy – it's double the size of the rescue package from the GFC.
We'll get more details later, but it is designed to help the industries that are suffering the most during the coronavirus outbreak as well as providing support for households.
It is believed that people who have been laid off will get help to pay their bills with reportedly US$1,200 for every adult and US$500 per child.
There will be US$350 billion in loans for small businesses to help with expenses for up to 10 weeks. Airlines and other businesses may be getting US$500 billion of aid to get through this period.
How did the US share market react? The S&P 500 (INX) finished 1.1% higher. The Dow Jones Industrial Average (DJI) finished 2.4% higher. The NASDAQ (IXIC) dropped 0.5%. However, all three had a late fall at the end of the day, suggesting there could be a decline tomorrow.
What's the ASX going to do?
It's hard to predict what a whole index will do because it's made up of a number of individual shares. Banks like Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB) have been heavily punished during this time.
The numbers of infections and deaths is increasing in most countries, but Italy's growth number is stabilising showing that the lockdown is working, in the short-term at least.
Only time will tell if we've already seen the bottom of the share market falls. There is a huge amount of support being delivered by governments around the world that should cushion the financial blow.
