Financial markets moved higher on news that finance ministers and central bankers from the Group of Seven economies will hold a teleconference tomorrow, Tuesday, on how to respond to the coronavirus pandemic. The expectation is that central banks in Japan, England, and the European Union will join the Federal Reserve in promising to act to support markets and economies if necessary. On Friday, Fed chair Jerome Powell promised that the Fed would respond as appropriate to the coronavirus outbreak and a slowing global economy. Wall Street took that to mean that the Fed would cut interest rates by 50 basis points at its March 18 meeting.
Today, as of 1 p.m. New York time the Standard & Poor’s 500 was up 171% and the Dow Jones Industrial Average was ahead 3.05%. The NASDAQ Composite moved up 2.80% and the Russell 2000 small cap index gained 1.35%. The iShares MSCI Emerging Markets ETF (EEM) added 0.96%.
The Technology Select Sector SPDR ETF (XLK) climbed 3.10% and the Financial Select Sector SPDR ETF (XLF) was ahead 2.03%.
The CBOE S&P 500 Volatility Index (VIX), the so-called “fear index,” dropped back by 16.8% to 33.40 as investors and traders unwound some of their volatility hedges.
