* A look at the day ahead from Senior Correspondent, EMEA Markets, Dhara Ranasinghe. The views expressed are her own.
LONDON, March 27 (Reuters) - Interactive graphic on global coronavirus spread: https://tmsnrt.rs/3aIRuz7
We are in a world where luxury perfumiers and haute couture houses are switching to producing sanitising gel, facemasks and medical overalls -- Italy's Armani being the latest to make that announcement.
Still, after weeks of pain and volatility, world markets were looking set for a calm, even upbeat end of the work week. Wall Street has enjoyed three straight days of gains, with the S&P 500 set for its biggest weekly jump since 1974, with a rise of 14% so far. European shares are on track for their best week since 2008 and in Asia, Japan's blue-chip index just logged its biggest weekly gain on record.
But despite a G20 pledge today to inject over $5 trillion into the global economy and more emergency interest rate cuts (India slashed its main rates by 75 basis points), the mood seems a bit hesitant. Markets in Britain, France and Spain are all down more than 2% and S&P 500 futures are down some 1.3%. The dollar has inched up (though on track for its biggest weekly fall in a decade.
Maybe not unsurprising given the astonishing gains of recent days. And bull markets can occur within bear markets. So this week's market gains could evaporate as quickly as they materialised.
For one, the coronavirus headlines remain disturbing. The United States is now the country with the most coronavirus cases, surpassing China and Italy. On the corporate front, aside from headlines about premium luxury houses switching production lines, there are signs of stress -- carmaker Daimler seeking a credit facility of at least 10 billion euros to cope with the outbreak and Nestle pledging to pay full salaries to employees affected by work stoppages for a minimum of three months.
Singapore Airlines said it had secured up to $13 billion of state funding to help see it through the crisis. Morgan Stanley, Goldman Sachs Group, Wells Fargo & Co, Deutsche Bank, HSBC and Citigroup have also reassured staff that job cuts are not on the table.
And if Thursday's U.S. weekly jobless claims data was anything to go by, there is a chance policymakers will need to stump up even more stimulus as the coronavirus slams the brakes on economic activity and increases healthcare spending. Profits at China's industrial firms slumped in the two months of 2020 to their lowest in at least a decade.
India became the latest to slash rates in an emergency move, lowering its benchmark repo rate by 75 basis points. In the euro zone, while the European Central Bank has made it clear it will certainly do "whatever it takes" to shore up the economy and prevent government borrowing costs from spiralling out of control, politicians are wavering again, failing on Thursday to agree on the scale of support for their economies.
Reflecting that dire economic outlook, oil is missing out on the general world market rally this week; Brent crude is set for a fifth straight week of losses.
DATA AND EVENTS Fri March 27 China industrial profits India central bank meeting France March consumer confidence Italy March consumer confidence ECB’s Klaas Knot speaks US Feb personal consumption US Feb PCE price index US University of Mich sentiment final – March Fitch to review UK ratings Moody’s to review South Africa, Hungary
(Reporting by Dhara Ranasinghe, editing by Larry King)