Markets rise, economies shrink

Markets were mostly higher on Thursday.

The S&P 500 rose less than 0.1 percent while the STOXX Europe 600 rose 0.9 percent and the Nikkei 225 jumped 1.5 percent.

Oil prices surged. West Texas Intermediate crude rose 19.7 percent and Brent rose 4.7 percent.

However, economic data released on Thursday were gloomy.

IHS Markit’s flash US composite output index plunged to 27.4 in April, the lowest since the series began in late 2009, from 40.9 in March.

IHS Markit’s flash eurozone composite PMI sank to 13.5 in April, its lowest reading since the survey began in mid-1998, from 29.7 in March. IHS Markit said the PMI was consistent with the bloc’s economy contracting 7.5 percent this quarter.

“The rather muted reaction relative to the amplitude of the misses proves the lack of surprise for markets, which are almost immune to data at the moment,” said Olivier Konzeoue at Saxo Markets.

However, as economies contract, Andrea Cicione, head of strategy at TS Lombard, said that the level of bad loans at banks is “worrying”.

“What the market is failing to appreciate is the size of the macroeconomic shock,” said Cicione.