3/16/2020 10:55 PM
(Act. 16.03.2020 22:55)
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The stock exchanges worldwide crashed on Monday – it was a kind of new “Black Monday”
© AP
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This means that the domestic leading index has lost around 44% in value since the beginning of the year and has dropped to its lowest level since the end of 2011. The Dow lost 13% today and suffered the worst loss since “black Monday” 1987.
The Vienna stock market closed on Monday with massive price losses. The ATX closed a whopping 209.34 points, or 10.46 percent, down at 1,791.42 points. This means that the domestic leading index has lost around 44 percent of its value since the beginning of the year and has dropped to its lowest level since December 2011. Once again, the uncertainty caused by the corona virus is responsible for the severe discounts.
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Measures against the spread of the virus worldwide have pushed equity markets far into the red. To slow down the pandemic, states have now partially closed their borders, largely restricted economic and social activities and, for example, largely brought air traffic to a standstill. This clouded the business prospects of virtually all companies in the countries concerned.
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On the other hand, neither announced government aid measures nor monetary policy easing from the Fed to the Bank of Japan to Chinese currency guards could alleviate the concerns of investors and companies. Half of the companies listed in the ATX posted double-digit daily losses at the start of the week. The shares of Immofinanz (minus 17.0 percent), DO & CO (minus 14.0 percent) and OMV (minus 13.73 percent) fell particularly sharply.
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Fear of the aftermath of the coronavirus crisis drove US stock markets the worst losses since Monday’s “black Monday” in 1987. The Dow Jones Industrial closed at almost 3000 points, or 12.93 percent, at 20,188.52 points. The US leading index ended at its lowest level in more than two years. The Dow had risen by a good nine percent on Friday, but still had a loss of more than ten percent on a weekly basis.
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The market-wide S&P 500 lost 11.98 percent on Monday to 2386.13 points. The technology-heavy Nasdaq 100 was down 12.19 percent to 7020.38 points.
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Financial stocks in particular were under pressure. The papers of the banks JPMorgan and Goldman Sachs listed in the Dow sagged by up to 15 percent. A low interest rate environment makes everyday business with loans, for example, less attractive.
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Bottom in the Dow were Boeing shares, which fell almost 24 percent to their lowest level since September 2016. Since the start of free fall three weeks ago, the value of the paper has decreased by almost two thirds. The new type of corona virus places a particularly heavy burden on worldwide air traffic and thus on the continued demand for Boeing aircraft.
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Airline shares were also under corresponding pressure. Delta Air Lines and United Airlines papers lost up to 15 percent. They even made up some of the losses after US President Trump assured that he would “100 percent” support the airlines.
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Apple’s shares went under 13 percent. The iPhone maker had announced it would close its 460 in-house stores outside of China for two weeks due to the spread of coronavirus. They want to help slow the disease, said CEO Tim Cook on Saturday. In addition, Apple was fined a good 1.1 billion euros by the French competition authority for what they considered to be illegal distribution agreements.
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Against the trend, Clorox papers rose 4 percent. Because of the virus pandemic, the manufacturer of disinfection solutions is currently benefiting from high demand for its products.
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Trump’s statement was an additional burden
Traders referred to additional incriminating statements from Donald Trump. The US president said on Monday that the US economy could slide into recession. He called on all Americans to avoid unnecessary trips and visits to bars and restaurants and to avoid the accumulation of more than ten people in the fight against the spread of the corona virus in the next two weeks.
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Dax drops below 9,000 points
The sell-off in the course of the coronavirus pandemic on the German stock market continued at the beginning of the week. After the leading index Dax had plummeted by almost 11 percent to its lowest level since 2013, a countermovement started on Monday afternoon on the stock exchanges in Germany, Europe and the USA. At the end of trading, the Dax was down 5.31 percent to 8742.25 points. However, the index was not granted a jump above the 9000 point mark throughout the day. The MDax lost 5.07 percent to 19 230.20 points.
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Fed rate cut doesn’t work
At the weekend, the US Federal Reserve surprisingly cut the key interest rate to almost zero percent and announced a package of measures in coordination with other central banks. However, this measure, intended to calm the markets, completely failed to have any effect. Markets.com analyst Neil Wilson spoke of a remarkable move by the Fed, but at the same time emphasized that the global economy is coming to a standstill. The currency keepers also lack the necessary antidote.
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Several central banks around the world have announced monetary policy interventions to mitigate the economic consequences of the pandemic. The International Monetary Fund (IMF) also plans to provide $ 1 trillion in credit lines to mitigate the effects of the pandemic.
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