Markets rise as IMF lowers global growth forecast

Markets rose on Wednesday.

The S&P 500 surged 4.2 percent, the STOXX Europe 600 jumped 1.4 percent and the Shanghai Composite rose 0.6 percent.

Markets rallied even as the International Monetary Fund’s managing director Kristalina Georgieva said that global economic growth in 2020 could dip below the 2.9 percent estimate in 2019 as a result of the COVID-19 outbreak. The IMF had previously forecast 3.3 percent growth for this year.

Indeed, economic reports on Wednesday pointed to significant negative impact already from the coronavirus.

The Caixin/Markit China services PMI plunged to 26.5 in February, the lowest on record, from 51.8 in January.

The Federal Reserve's latest beige book report noted that there were “indications that the coronavirus was negatively impacting travel and tourism in the U.S.” and that “some supply chain delays were reported as a result of the coronavirus and several Districts said that producers feared further disruptions in the coming weeks”.