Weekly Feed3 Mins Read
Kristal Weekly Feed I 30th 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:
- This was a week of rising cases of Covid-19 and stimulus packages being introduced around the globe.
- The US Government declared a $2.2 trillion package to rescue the economy from the effects of the pandemic.
- Most markets around the globe responded positively to this news and managed to recover some of the losses incurred over the last few weeks.
- The number of confirmed Covid-19 cases in the US crossed 100,000 and the overall global numbers crossed the half-million mark, leading to a slump in most European stocks by the end of the week.
Covid-19 now has 591,971 confirmed cases around the globe and the death toll is at 26,990.
Most US investors expected the Government to release information about the $1 trillion stimulus package over the weekend. However, the Senate failed to pass the bill that was targeted at authorizing fiscal spending for the second time. This impacted the investor sentiment as all three major indices closed in the red. However, a statement made by the Treasury Secretary that the Senate would meet again to come to a consensus managed to restrict the fall.
On Tuesday, senior Republicans and Democrats announced that the Senate was close to finalizing a $2 trillion package to provide financial aid to people out of work and industries that were suffering due to the pandemic. This helped boost the market sentiment as the Dow Jones Industrial Average Index jumped 11.37%, the S&P 500 closed 9.38% higher and the Nasdaq Composite gained 3.12%. The investors remained hopeful about the progress of the stimulus package on Wednesday too. The bill is expected to provide loans of nearly $360 million to small businesses as well as direct payments of $1200 to individual US citizens. On Thursday, the Senate finally approved the $2 trillion package that was to be signed into law by Saturday. Investors were thrilled as the markets rallied for the third day in succession. Unfortunately, this rally ended on Friday as the number of confirmed cases in the US cross the 100,000 mark. Investors grew skeptical again about the impact of the pandemic on the country’s economy.
In Europe, the markets started the week in the red as many countries faced the economic brunt of the pandemic. The pan-European Stoxx 600 closed 4.30% lower while the FTSE 100 dropped 3.79%. Tuesday was a good day for European stocks as the number of new coronavirus cases in Italy slowed for the second day in succession and the US Senate prepared itself to finalize a $2 trillion stimulus package. On Wednesday, as the US Senate agreed on the stimulus package, most European stocks rallied for the second day in succession markets closing in the green. By Thursday, the US jobless claim ballooned to a record high due to the fallout of the pandemic. Surprisingly, the European markets reacted favorably as investors bet on a further increase in the stimulus. The rally ended on Friday as the European leaders failed to reach a consensus on an economic response to the effects of the virus. The pan-European Stoxx 600 closed 3.26% lower.
Monday saw most major indices in the Asia-Pacific close in the red as investors feared a likely recession due to lockdowns and travel curbs in most countries. Thailand led the losses with its SET index closing 9.12% lower. Tuesday was a good day for the investors in the region as most indices closed higher with New Zealand’s NZX 50 leading the gains (+14.20%). Like the rest of the world, the Asia-Pacific markets responded optimistically to the $2 trillion economic stimulus package announced by the US Government.
Thursday was a mixed day for stocks in the region as investors awaited the US jobless claims data as it could be an indicator of the economic impact of the virus. The week ended on a mixed sentiment too as investors stayed observant and concerned about the global economic impact of the pandemic.
Heading into next week…
As the world battles with the pandemic, countries are doing all they can to help their citizens stay safe and reduce the impact on the economy too. However, with the number of confirmed cases and death increasing every day and lockdowns and travel restrictions still in place, people are looking to authorities to bail them out of the economic crisis that is a likely fallout of this pandemic. We understand that this is a difficult time to stay optimistic and as we hope that the world wins this battle soon, we urge all our investors to refrain from any emotion-driven investment decisions. They must keep working on their portfolios and look for ways to maximize their gains during such volatile times.
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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