Here is a recap of important news items and market movements from across the globe on Thursday, March 19, 2020:
- The global coronavirus pandemic continues to spread exponentially within Europe and from its epicenter in Europe, with more and more countries imposing lockdowns and restrictions which are causing very significant economic damage. A global recession appears to be inevitable. Stringent restrictions continue to be imposed in Europe and the U.S.A. New cases in hot weather countries have dented hopes that warmer weather may halt the spread.
- Fatalities in many European countries are beginning to increase, with Italy having its worst single day yet. However, in about 5 days, it is hoped the Italian lockdown will have had enough time to begin to slow deaths and new cases.
- The U.S. stock market’s major index, the S&P 500, declined against yesterday. All stock markets have been suffering heavily and most are down by nearly one third in value over just the past few weeks. Trading on the Korean stock market was halted at limit down with the KOSPI (index) down by 8%.
- The British Pound fell very heavily yesterday to a new 35-year low as the U.K. seems to be beginning a fast spread, which forced the Government to amend its policy more toward suppression. British schools will be closing Friday.
- The Australian Dollar fell yesterday to a new 17-year low. As in the U.K. there is a sense that the Australian government has been too slow in reacting to the pandemic.
- Commodities such as Crude Oil (new 18-year low) and Silver (new 10-year low) have been falling heavily, although Bitcoin has stabilized over the last day or two from its recent strong fall.
- The U.S. Dollar is king, with the Japanese Yen and Swiss Franc also relatively strong, while the British Pound, New Zealand, Australian, and Canadian Dollars look especially weak. The dominant theme in markets is very high directional volatility, and plummeting consumer demand. This provides opportunities for traders, but close monitoring of trades on short time frames is very advisable due to the strength and speed of price movements.
- The European Central Bank yesterday announced a 750 billion Euro emergency bond purchase program.
- The key factor in markets today will likely be how the U.S. Treasury and Administration continue to tackle the crisis, with enormous pressure building to take very drastic lockdown measures to save not only health but the economy, although a $1 trillion stimulus package was unveiled yesterday. New York has seen a sharp rise in cases and the first member of Congress has tested positive. Any especially bad news on the coronavirus is likely to mean lower stock markets, and vice versa.