[Lunes negro] Coronavirus and crude oil price hit financial markets in the US and Europe | El Salvador News

The Industrial Dow Jones average closed operations on Monday with a loss of 7.8%, its worst decline since the financial crisis of 2008, due to the collapse in oil prices and fear of the aftermath of the spread of the new coronavirus They hit the financial markets.

The marked fall triggered the first automatic interruptions in more than two decades. Similarly, European markets recorded their worst losses since the most serious days of the 2008 crisis and are now in a bear market.

Together, the damage reflects the growing alarm over the coronavirus epidemic that has caused the closure of factories, schools and businesses, and unleashed unprecedented travel and quarantine restrictions.

“The market has suffered a crisis of confidence,” said Willie Delwiche, an investment strategist at Baird. Bond yields fell to a record low because investors seek refuge in safer places.

The collapse in the markets occurred while Italy, the most affected place in Europe, began to isolate 16 million people in the north of the country, practically 25% of the population. He later announced that he would impose restrictions on transfers nationwide.

Italian Prime Minister Giuseppe Conte said that all people will have to prove a valid reason to travel outside the area where they live. The measure is expected to push Italy into a recession and weigh in the European economy as a whole.

The growing health crisis, combined with another factor: the collapse in oil prices, weighed the market. Oil lost almost 25% after Russia refused to reduce its production in response to low demand related to the virus, and Saudi Arabia said it would increase its supply.

On Wall Street, the S&P 500 fell 7.4% in the first minutes of operations before the switches were activated, which were first implemented after the fall of October 1987 and have been modified throughout the years to give investors the opportunity to calm their nerves.

The switches in the entire market have only been activated on a previous occasion: 1997. After the 15-minute break, the S&P reduced its losses, but also closed with losses of 7.6%. The Dow Jones yielded 2,013 integers, or 7.8%, to 23,851.02. The Nasdaq lost 7.3%.

The fall placed Wall Street on the edge of a bear market, defined by a 20% loss from its highest point. In Italy, the market lost 11.2%. Britain, France and Germany fell between 7.7 and 8.4%. The yield on the 10-year Treasury bond fell to 0.59%. Until last week, I had never been below 1%.

The energy sector was severely affected. Reference US crude fell below $ 32 per barrel. Including Monday’s crash, the S&P 500 accumulates losses of 18.9% since it reached its all-time high last month. If it reaches a 20% decline, it would mean the death of the longest bull market in the history of the United States, 11 years. Monday is the 11th anniversary since the market reached its worst record after the financial crisis of 2008.

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