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A slight recovery followed Stock marketsThen, the new downturn began, with the spread of the virus in South Korea and Italy, and the warnings that followed it from the American Centers for Disease Control, to exceed the overall market losses of about six trillion dollars.
The American markets suffered the heaviest losses. From January 20 to the end of February, the Dow Jones lost more than 13%, while the S&P lost more than 11%.
In the last week of February, the indices recorded their worst weekly performance since 2008, and as a result, the US indices entered what is known as the correction process.
And the Dow Jones index suffered, last week, losses exceeding 3500 points in total, and the heaviest was trading Thursday, in which the index was the largest daily loss in its history.
The losses were not limited to the American markets. The Shanghai Composite Index declined during the period by more than six percent, the Japanese Nikkei 12 percent, and almost the same percentage for the STOXX600 index.
The panic in the markets was translated by the Fear Index, which jumped 231 percent, and hit its highest level since February 2018, specifically with the US tariff crisis.
But what are the reasons for this concern in the markets?
There are a number of factors, the most prominent of which is the impact of the virus on Chinese growth. China represents 16 percent of the global economy, contributes to one third of global economic growth, and it accounts for a third of global industry, and is a major player in world trade.
The second factor is concern about supply chains, as we mentioned China as the center of a large number of industrial activities, and according to the latest data, Chinese industrial activity fell during February at the highest rate ever, with two-thirds of the economy’s activities ceasing to function.
As a result of the foregoing, Goldman Sachs expected that American companies will not achieve growth in their profits during the current year, which is an additional factor that contributed to falling markets, and pushed investors to investment channels away from stocks.
The spread of the virus has also caused huge losses to the group, particularly the energy and mining sector, with Brent losses exceeding 24 percent since the beginning of this year.
Other sectors affected were the tourism and travel sector, the auto sector and the marine transport sector.
In front of this whole scene, a group of questions began about the optimal investment option in 2020, as the dollar received great attention this year, climbed about 2 percent, and approached its highest level in three years.
While the gold ounce rose by more than four percent, and the government bond index rose by more than 2 percent, and this is a clear indication of investors ’orientation towards safe havens. The global stock index fell by more than seven percent, and the commodity index fell 12 percent in the first Two months from 2020.
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This was followed by a slight recovery in the stock markets, and then the new wave of decline began, with the spread of the virus in South Korea and Italy, and the warnings that followed it from the American Centers for Disease Control, accelerating, so that the overall losses of the markets exceeded six trillion dollars.
The American markets suffered the heaviest losses. From January 20 to the end of February, the Dow Jones lost more than 13%, while the S&P lost more than 11%.
In the last week of February, the indices recorded their worst weekly performance since 2008, and as a result, the US indices entered what is known as the correction process.
And the Dow Jones index suffered, last week, losses exceeding 3500 points in total, and the heaviest was trading Thursday, in which the index was the largest daily loss in its history.
The losses were not limited to the American markets. The Shanghai Composite Index declined during the period by more than six percent, the Japanese Nikkei 12 percent, and almost the same percentage for the STOXX600 index.
The panic in the markets was translated by the Fear Index, which jumped 231 percent, and hit its highest level since February 2018, specifically with the US tariff crisis.
But what are the reasons for this concern in the markets?
There are a number of factors, the most prominent of which is the impact of the virus on Chinese growth. China represents 16 percent of the global economy, contributes to one third of global economic growth, and it accounts for a third of global industry, and is a major player in world trade.
The second factor is concern about supply chains, as we mentioned China as the center of a large number of industrial activities, and according to the latest data, Chinese industrial activity fell during February at the highest rate ever, with two-thirds of the economy’s activities ceasing to function.
As a result of the foregoing, Goldman Sachs expected that American companies will not achieve growth in their profits during the current year, which is an additional factor that contributed to the decline in markets, and pushed investors to investment channels away from stocks.
The spread of the virus has also caused huge losses to the group, particularly the energy and mining sector, with Brent losses exceeding 24 percent since the beginning of this year.
Other sectors affected were the tourism and travel sector, the auto sector and the marine transport sector.
In front of this whole scene, a group of questions began about the optimal investment option in 2020, as the dollar received great attention this year, climbed about 2 percent, and approached its highest level in three years.
While the gold ounce rose by more than four percent, and the government bond index rose by more than 2 percent, and this is clear evidence of the investors ’approach towards safe havens. The global stock index fell by more than seven percent, and the commodity index fell 12 percent in the first Two months from 2020.
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