Daily summary: Global equity markets rose despite poor macroeconomic data

European indices finished today’s session higher  as investors awaited the outcome of a EU Summit later in the day at which European leaders are set to discuss measures to support coronavirus-hit economies. According to Bloomberg, German Chancellor Angela Merkel will tell EU leaders on Thursday that the coronavirus economic response package "must be huge." This headline by itself provided some boost to the market sentiment. Euro managed to break above 1.08 and major European equity indexes also posted decisive gains despite the fact that the eurozone composite PMI fell to a record low of 13.5, as demand for services in particular collapsed against a background of reduced incomes and extremely depressed confidence. DAX 30 finished 1.1% higher, CAC 40 advanced 0.9% and FTSE100 rose more that 1%.

US indices are trading in green today amid signs of additional output cuts by major oil producers and rising tensions in the Middle East. Yesterday President Trump tweeted he has instructed the US Navy to shoot down any Iranian gunboats that harass US ships at sea. Iran officials replied that US warships will be destroyed if they threaten Iran in Gulf. Also, the Oklahoma’s energy regulator approved an emergency order that allows oil producers to stop or reduce production without losing their leases for non-production. WTI oil  extended yesterday gains  and wass trading around $18 a barrel. Brent price hit $23 per barrel.

It seems that investors have once again ignored the weak macroeconomic data from the US which showed the number of Americans filing for unemployment benefits came in at 4.427 million in the week ended April 18th, above market expectations of 4.2 million. Today's figure was however lower  in compare to 5.24 million from the previous week. Latest Markit PMI data showed US private sector and services activity plunged at a record pace in April. "The decline in initial jobless claims is encouraging, but the damage has already been done with the insured unemployment rate surging to a record high in the (previous) week," said Paul Ashworth, chief U.S. economist at Capital Economics.  US stocks rose based on further stimulus hopes as the House of Representatives is expected to pass a $484 billion coronavirus stimulus package today, aiming to provide help for small businesses and hospitals. Most of the economy is likely to be restarted by the end of August, Treasury Secretary Steven Mnuchin said late Wednesday. This comes as more states in the South and Midwest signaled readiness to reopen their economies in hopes the worst of the coronavirus pandemic had passed, with the notable exception of California. "The worst is probably over in terms of the epidemic, but with oil prices at these levels, there will be layoffs coming in from the energy sector and that will offset the fact that states are beginning to open up," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Meanwhile number of confirmed coronavirus cases in the US reached almost 854 000 of which 48 358 people have died. Analysts have lowered their profit expectations for S&P 500 for the first and second quarters, while companies have taken radical measures to reduce costs to overcome the economic crisis. During today's trading session Dow Jones rose 0.85 %, S&P500 gained 0.73 % and Nasdaq is trading 0.90 % higher.

Gold prices rose after the decision of the European Central Bank regarding loosening of rules on collateral for credit operations, which means that the ECB will continue to lend to Italian banks, even if their sovereign’s credit rating is downgraded to junk as a result of the pandemic. Gold prices rose to as high as $1750/oz and silver futures gained 1.4% at $15.55/oz.

UK retail sales, German ifo business climate index and US core durable goods orders are the main data releases scheduled for tomorrow. On the earnings front Verizon Inc (VZ.US) and American Express Co (AXP.US) will report their quarterly results.