Jakarta, CNBC Indonesia – European stock markets ‘on fire’, all major indexes fell significantly. It looks like a correction will also occur in the New York stock exchange.
On Thursday (20/8/2020) at 19:22 WIB, the following is the development of the main stock index of the Blue Continent:
“Mood market changes after seeing the release of meeting minutes (minutes meeting) the US central bank. Investors are reminded that the economy is still not recovering, “said Hussein Sayed, Chief Market Strategist at FXTM, as reported by Reuters.
During the day, investors have been nervous about responding to the minutes of the US Central Bank Policy Making Committee (Federal Open Market Committee/ FOMC) July 2020 edition. The results of the meeting were indeed in line with expectations, the benchmark interest rate was held at 0-0.25%. But what is worrying is the ‘mystic atmosphere’ in it.
In the 13-page note, the word uncertainty (uncertainty) appears eight times. For example on page eight, it is stated that the economic impact of the corona virus pandemic (Coronavirus Disease-2019/ Covid-19) raises higher uncertainty.
“The uncertainty regarding the economic impact of the pandemic has increased tremendously. The resulting pressure is making economic forecasts more challenging than before,” the minutes wrote.
Therefore, it seems that the rate of economic recovery in Uncle Sam’s country will be slower than originally estimated. Because the corona virus outbreak has already given a devastating blow to the economy.
“The recovery in the rate of Gross Domestic Product (GDP) and the unemployment rate in the second half of 2020 may not be as fast as previously thought. This is because economic activity has slowed to a record low in the second quarter of 2020,” the minutes continued.
Not only in Europe, it looks like a correction will still haunt Wall Street. Data futures at 19:30 WIB showed that the Dow Jones Industrial Average (DJIA) was down 0.4% while the S&P 500 was down 0.23%.
The employment data in Uncle Sam’s country has made investors resign regularly. In the week ended August 15, the number of claims for unemployment benefits was recorded at 1.106 million. An increase compared to the previous week, namely 971,000.
This data provides confirmation from the Fed’s projections, that the labor market is still vulnerable. The wave of layoffs (layoffs) is not over, which makes prospects for economic recovery dim.
CNBC INDONESIA RESEARCH TEAM
(aji/aji)
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