Wall Street down sharply
saturday, 28.03.2020
news-single-imgcaption" style="width:240px">As a sign of the shock caused by the coronavirus, consumer confidence plummeted in March. (Keystone)
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The Dow Jones Industrial Average, the leading Wall Street index, fell 4.06% to 21,636.78 points, but climbed 17.6% over the week. It was the largest weekly increase for the New York flagship index since June 1931.
The highly technological Nasdaq lost 3.79% to 7,502.38 points, but recorded a weekly increase of 9.1%.
The broader S&P 500 index lost 3.37% to 2,541.47 points while climbing 10.3% for the week.
For Gregori Volokhine of Meeschaert Financial Services, “what stabilized the markets this week was the intervention of central banks”.
“In the United States, the Federal Reserve has said, in a way, that it guarantees all the debt that exists. There are only rare parts of the debt that it will not guarantee”, underlines the expert.
The American Central Bank has indeed announced injecting thousands of billions of dollars to help the first world power to cope with the economic impact of the coronavirus pandemic.
The Fed notably decided on Monday to no longer set limits on its purchases of treasury bills and mortgage securities.
On Thursday, his boss Jerome Powell assured that the institution would continue to lend money “aggressively.”
Investors also welcomed the adoption of a titanic economic rescue plan that will mobilize some 2,000 billion dollars to relieve the businesses and households most affected by the crisis.
US President Donald Trump promulgated the text on Friday, shortly after the end of Wall Street.
“What is important is the symbol of unity between Democrats and Republicans,” observes Mr. Volokhine, who nevertheless considers that the measures as such are insufficient to mitigate the devastating economic consequences of the pandemic.
Trust
As a sign of the coronavirus shock, consumer confidence plummeted in March, recording its fourth largest drop in half a century, according to the final estimate from the University of Michigan survey released on Friday.
The day before, the number of unemployment benefit claimants in the United States had risen to a record with 3.3 million new registrations.
“The figures will be catastrophic, but what is important is what we will face these figures,” warns Mr. Volokhine.
On the bond market, the 10-year rate on the American debt plummeted, settling at 0.6746% around 9:00 p.m. GMT against 0.8447% the day before at the close.
Among the values of the day, Boeing (-10.3%), Chevron (-10%) and Disney (-8.5%) ended in strong decline, pulling the Dow Jones down.
Cruise lines Carnival and Norwegian Cruise Line plummeted 19.1% and 23.5%.
Lululemon lost 6%. The yoga pants specialist reported better than expected quarterly results but also announced that his sales fell sharply in the second week of March with the closure of his stores in Europe and the United States due to the coronavirus.
General Motors fell 5.2%. Donald Trump forced the automaker, Friday by decree, to produce artificial respirators to deal with the coronavirus. (awp)
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