U.S. equity futures rallied on Friday, along with European stocks. Yesterday, concerns over the second wave of COVID-19 infections and a slower-than-expected economic recovery prompted a dramatic sell-off. As a result, Wall Street suffered its biggest collapse in 12 weeks on Thursday.
However, contracts on the three main American equity benchmarks pointed to significant gains today. The Stoxx Europe 600 Index skyrocketed. Banks, carmakers, and travel companies led gains after driving Thursday’s losses. WTI crude also steadied, at around $36 a barrel in New York, after an earlier decline.
According to new data, the U.K. economy shrank at a record of 20.4% in April. Despite that, the pound climbed up higher after a report showed Asian equities plummeted overnight.
After the March lows, stock markets rallied frantically, partially recovering their losses from the previous months. However, pessimistic sentiment about the pace of recovery following months of restrictions and lockdown caused the futures’ plunge this week.
The recovery from the pandemic will take more time
On Friday, the International Monetary Fund stated that the global economy is bouncing back more slowly than expected. Adding that it will bear lingering scars from the coronavirus pandemic. Furthermore, there’s the danger of the second wave of infections that could significantly hinder the recovery. Despite that, investors seem to be in a bullish mood again.
Janet Mui, investment director at Brewin Dolphin Holdings Plc in London, stated that analysts see some positive points. The worst is over, and the economy is gradually re-opening. Still, they also see downside risks. That’s why investors are currently adding a bit of equity, primarily to the U.S. and emerging markets, or ex-Asia.
On Friday, futures on the S&P 500 Index surged forward by 1.6%. The Stoxx Europe 600 Index also jumped up by 0.8%. On the other hand, the MSCI Asia Pacific Index plummeted down by 1.2%, and the MSCI Emerging Market Index dropped down by 0.8%.