US markets regain some ground after Monday’s bruising selloff, worst day in 12 years

By Xie Yu.(The Wall Street Journal) – International markets regained ground after Monday's bruising selloff, with American stock futures gaining more than 3%, as investors welcomed the prospect of new US tax cuts and other measures to counter the economic pain caused by the novel coronavirus..President Trump said Monday his administration would discuss several proposals with Congress, including a possible payroll-tax cut and help for hourly wage earners..___STEADY_PAYWALL___.By early afternoon in Hong Kong on Tuesday, E-mini S&P 500 futures had surged about 3.5%, suggesting US stocks could claw back some of their losses when trading begins later in the day..In another sign of improving investor confidence, the yield on the benchmark 10-year Treasury rose to 0.675%, suggesting demand for the safest assets had abated somewhat. The yield hit a historic low of 0.339% on Monday as investors rushed for cover, before settling at 0.501%. Yields rise as bond prices fall..In the Asia-Pacific region, Australia's benchmark S&P/ASX 200 index rebounded to close up 3.1%, after an initial fall that would have left it in bear-market territory had it held through the day. Japan's benchmark Nikkei 225 pared steep early losses to add 0.5%..Brent crude, the global oil benchmark, also recouped some of the previous session's losses, rising about 7.7% to $37.00 a barrel.."What we see today on global markets is led by US stock futures," said Frank Benzimra, head of Asia equity strategy at Société Générale in Hong Kong. "Markets are welcoming some policy shifts that seem [likely] to be taken by the US government, including payroll tax cuts, or targeted measures easing cash-flow issues for some companies.".However, Mr. Benzimra said markets would remain volatile and the collapse in oil prices, plus the stock-market selloff, would hurt the real economy..In mainland China, the benchmark Shanghai Composite Index gained 1.6%. The Hang Seng Index in Hong Kong added 2%..Chinese President Xi Jinping arrived in Wuhan for a surprise visit – his first trip to the epi-centre of the coronavirus epidemic since the health crisis began..WORLDVIEW: Why is the coronavirus freaking markets out?.Major U.S. stock indexes suffered their steepest single-day falls since 2008 on Monday, tumbling more than 7%, after oil prices slid the most since the Gulf War in January 1991. Indexes in Germany, France and Britain slid into bear markets, as did some sectors of the US market.."It is quite normal for the market to have a minor revision after the brutal selloff on Monday, but it is far from a rebound," said Hong Hao, chief strategist at Bocom International Holdings..Mr. Hong said the Trump administration proposals appeared to reassure investors by suggesting "the government still has measures to contain the damage brought by the coronavirus.".However, Mr. Hong added, many uncertainties remained, including energy prices, and what the U.S. Federal Reserve will do to follow its emergency interest-rate cut last week..– Write to Xie Yu at Yu.Xie@wsj.com

US markets regain some ground after Monday’s bruising selloff, worst day in 12 years

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