The rising number of infections combined with the US Congress’s disapproval of aid made the US futures stock once again down to the limit.
In the session today 22/3 US time, the S&P 500 has lost 5% of the value, the reduction of the floor so that lower transactions are not allowed to perform. Australian stocks sometimes dropped by 8% while South Korean and Hong Kong stocks lost about 5% of their value. The dollar continued to appreciate against other currencies in the currency basket. The New Zealand dollar fell.
In the context of investors assessing the severity of the upcoming recession, James Bullard, President of the Federal Reserve Bank of St. Louis, the US unemployment rate is expected to reach 30% in the second quarter due to business activities stalled by the virus spread.
The market is now heading towards a global crisis that will occur as the previous warnings. In this case, Goldman Sachs strategists Kamakshya Trivedi and Zach Pandl say that investors should be defensive.
The uncertainty surrounding the timing and extent of the corona virus’s impact on the global economy remains high. The pessimistic signals covered and the figures reflecting the increasing impact caused investors to sell off assets to keep cash.
In the context of a series of countries launching stimulus measures, the strong spread of viruses makes them less valuable. The recession in the US can be very profound and the unemployment rate may soar, Morgan Stanley warned.
In the United States, the Democratic Party prevented the US Senate from accepting a huge package of anti-virus aid when House Speaker Nancy Pelosi said that the measures had not yet achieved the desired goals. In the latest policy moves elsewhere, the New Zealand Central Bank said it would buy up to $ 17 billion of government bonds in the secondary market in the next year. The Central Bank of Thailand has taken steps to stabilize its financial system.
US stock indexes all rose after a report said the US could reduce taxes on Chinese goods in its trade negotiations.
The idea was given by Finance Minister Steven Mnuchin, according to the Wall Street Journal. However, the report added that Mnuchin faced resistance from US Trade Representative Robert Lighthizer, who argued that any concessions could be considered a sign of weakness.
The report helped stocks to the highest level of the day, with the Dow Jones industrial average gaining more than 250 points. S&P 500 and Nasdaq Composite all gained about 1% after the report.
However, the main indexes failed to peak after the Ministry of Finance spokesman working with the trade group said: None of Mnuchin Minister and Ambassador Lighthizer made any recommendations for anyone involved in tariffs or other parts of negotiations with China. This is an ongoing process that has not yet achieved concrete results.
A senior government official who attended a trade meeting with the president on Wednesday told that there was no discussion about tariff removal. Currently, the official also said that President Donald Trump was not interested in making a decision right now because that puts him in a weak position.
The Dow closed up 163 points, escaping from the correction. The S&P 500 ended the day up 0.76% while the Nasdaq rose 0.7%.
Caterpillar shares rose 2.2%, while Boeing increased 2%. Shares of Caterpillar and Boeing are considered the bell for global trade when operating these two companies in relation to foreign markets. Apple also increased 0.6%.
Netflix is expected to report today. This stock is currently the brightest star in the market in 2019 when it has increased by more than 31%. Netflix’s profit will increase sharply after the online giant announced it would raise monthly subscription prices from 13 to 18 earlier this week.
Morgan Stanley reported profits and unimproved revenue for Wall Street. The company’s results have been pulled down by poor achievements in business enterprises and asset management. Morgan Stanley shares fell 4%. Citigroup, J.P. Morgan Chase and Wells Fargo also reported quarterly earnings this week.