Weekly Feed5 Mins Read
Kristal Weekly Feed I 23rd March 2020
With a busy schedule, it can get difficult to understand and analyze major events around the globe and how they affect your investments. In our weekly market update, we help you slice and dice the latest news updates to make informed investment decisions.
Headlines this week:
- With the coronavirus strengthening its grip around the globe, this was another week of extreme volatility in markets around the globe
- Wall Street had its worst week since the market crash in October 2008
- Europe became the epicenter of the pandemic as Italy’s death toll surpassed that of China with an exponential impact on the economies of European countries
- The US Federal Reserve slashed its benchmark interest rate to zero in an emergency move. The White House looked for Congressional approval for a fiscal stimulus package of around $1 trillion
- The European Central Bank and the Bank of England, along with many other central banks around the globe made new policy announcements to help boost investor confidence
Tracking the 2019-n-CoV
Covid-19 now has 271,364 confirmed cases around the globe and the death toll is at 11,252. Countries with confirmed cases of Covid-19 include:
Monday was one of the worst days in the history of Wall Street with all major indices losing nearly 12% as panic selling drove the markets down. Investors have been growing increasingly concerned about the uncertainty around the end of the economic effect of the pandemic. Also, with the President hinting that the economy might head into a recession, all stimulus packages failed to boost investor confidence. Tuesday was a better day for the markets as news about the President planning to induce a fiscal stimulus package of around $1 trillion helped most major indices close in the green.
However, the mood didn’t last long as the markets reversed the gains of the previous day and ended at another low on Wednesday. Large-cap tech stocks managed to drive the markets up on Thursday supported by an increase in investor confidence due to stimulus packages announced by central banks around the globe. Even as investors struggled to find the light at the end of the tunnel, the worries about the damage to the economy played heavy on their minds as Wall Street recorded its worst week since October 2008.
The pan-European Stoxx 600 dropped more than 4% on Monday as investors reacted to the 15-day lockdown in Spain and the European Commission’s proposal to ban foreign visitors into the continent for 30 days. Overall, the European markets closed in the red on Monday. Tuesday was a better day as hopes of stimulus packages boosted investor confidence and helped most indices close in the green. However, with constant updates regarding the spread of the virus, hopes couldn’t last long and markets closed lower on Wednesday neutralizing their gains on Tuesday. As new policy announcements from the Bank of England and the European Central Bank hit the markets, investor confidence received a boost. This led to most markets closing higher. This optimism overflowed into Friday as most European markets closed in the green hoping that the stimulus packages manage to mitigate the economic impact of the virus.
The Asia-Pacific markets followed the global trend and started the week in the red as investors stayed watchful over the economic impact of the virus. Australia led the losses with the S&P/ASX 200 dropping by nearly 10%. Tuesday was a mixed day for stocks in the region. While markets in Australia, Hong Kong, and Japan managed to close higher, most other markets couldn’t make it to the green zone. Investors in the Asia-Pacific region have been constantly monitoring the global economic impact of the pandemic and trying to look for hope to stay positive.
However, all the stimulus packages failed to boost investor confidence as Wednesday saw most major indices closing in the red. Thursday was no different as South Korea’s Kospi Index led the losses as it dropped around 8.39%. By the end of the week, most markets in the region ended in the green as investors tried to push aside all fears and remain optimistic. This optimism was also fueled by gains in markets around the globe.
Heading into next week…
The world is struggling to cope with the health and economic impact of the novel coronavirus. While governments and central banks are taking all possible measures to reduce the economic impact, uncertainty is keeping investors away from the markets. With the epicenter shifting from China to Europe, most European investors will be concerned about the time the economy will take to recover from the impact. During such times, it is important to steer clear of any emotion-driven investment decisions. Investors are advised to keep working on their investment plans and strategies by assuming volatility to be the theme over the next few weeks. Stay vigilant – Stay Safe.
The materials and data contained herein are for information only and shall in no event be construed as an offer to purchase or sell or the solicitation of an offer to purchase or sell any securities in any jurisdiction. Kristal Advisors does not make any representation, undertaking, warranty or guarantee as to the update, completeness, correctness, reliability or accuracy of the materials and data herein. All opinions, forecasts or estimation expressed herein are subject to change without prior notice. Kristal Advisors and its affiliates accept no liability or responsibility whatsoever for any direct or consequential loss and/or damages arising out of or in relation to any use of opinions, forecasts, materials and data contained herein or otherwise arising in connection therewith.
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