Uncertainty continues to prevail on the stock exchanges. On Wednesday a certain skepticism about the further development of the corona pandemic weighed on the courses in Europe. The US stock markets also fell by more than four percent.
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On Wednesday, the New York Stock Exchange went down significantly again
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The exchanges ended trading on Wednesday with some significant price reductions. Some investors seem to be taking profits that they had made on the spreads of the past few days. They look over the Atlantic with growing concern. The United States has become the new epicenter of the coronavirus pandemic. The number of newly infected people and deaths there is still growing rapidly, and there is no sign of a slowdown in sight.
For this reason, the forecasts for the future development of the global economy and corporate profits are becoming increasingly negative – with a corresponding impact on the stock exchanges. Skeptical analysts warn of the short-lived nature of massive “course flashlights”. They anticipate that the indices have not yet seen their lows.
Heavy losses in the US and Europe
On Wall Street, the Dow Jones Industrial, S&P 500 and the Nasdaq Composite each lost 4.4% of their value on Wednesday. The example of the cruise line papers shows how quickly and strongly the mood can fluctuate. For example, Carnival Corporation and Royal Carribean Cruises shares fell 33% and 20%, respectively, after recovering somewhat from the massive sell-off in recent weeks.
While recent economic data showed that US manufacturing activity contracted less than expected in March, the disruption caused by the coronavirus pandemic caused order intake to drop to its lowest level in eleven years. Statistically speaking, the first weak numbers appear on the labor market, which are only beginning to show what is yet to come.
Around two weeks before the start of the “profit season” for the first quarter, investors are “very sensitive to the latest headlines” “about the virus because of lack of basic information, experts explain. They expect that the S&P 500 Enterprises may enter a profit recession in 2020 and earnings could fall by a good 4% in the first quarter and even up to 11% in the second quarter.
The courses dived equally in Europe. The heavyweight index SMI lost 1.5% in value to 9167 points. Above all, Swiss Re’s papers were down 6.7%, followed by Adecco’s papers with a loss of 6.2%, the large bank stocks of Credit Suisse (-5.5%) and UBS (-4, 6%) and the titles of economically sensitive companies. However, there were price gains at Nestle, Swisscom and Roche.
The German stock market also went down. The leading index DAX fell by almost 4%, the Euro-Stoxx 50 started the month with a price loss of 2.4%.
“Last week’s consolidation could have been the calm before the second storm on the stock exchange,” commented market expert Milan Cutkovic from AxiTrader. While hopes are increasing that Europe may soon reach the peak of the pandemic and China’s economy is already sending the first signs of recovery, the corona virus continues to spread rapidly in the United States. According to the expert, it doesn’t take much negative news, so investors would switch back to panic mode.
In any case, the volatility of the stock exchange remains very high, as the graphic shows.
Strong price fluctuations
Dow Jones Daily Changes in%
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The stock markets have made up some of the losses in recent days. However, the most important indices are still 25 to 15% below the level before the Corona crisis.
Continue in the bear market
Dow Jones Index, points (in thousands)
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Nikkei falls far below
Asia’s leading exchange has slumped again. The Nikkei index for 225 leading stocks plummeted Wednesday by 4.5% to 18,065.41 points. He had previously lost more than 1,000 points when the central bank published a survey that suggests gloomy expectations from companies.
The Chinese markets benefited little from good economic data. A mood survey in industrial companies in the country indicated an economic recovery. The CSI 300 with the 300 most important shares of the Chinese mainland stock exchanges was traded at a discount of 0.3%. In Hong Kong, the Hang Seng was down 2.5% at 9 a.m.CET.
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