The US markets jumped into another ugly session with both feet, causing the Dow Jones to suffer another quadruple-digit decline.
Falling more than 6.5%, the Dow found itself back below 20000, at prices last seen over 3 years ago.
Some of the European indices weren’t far off that percentage decline. The CAC was down 6.1%, joined by a 4.7% slide from the DAX and a 3.8% plunge from the FTSE.
The UK index was likely ahead of its peers due to the abject state of sterling. Investors clearly gave up on the pound as the session went on – take from that what you will about the UK government’s response to the coronavirus crisis – sending a cable to its lowest price since the 1980s. And it wasn’t just safe haven-seeking dollar-chasers. The pound was also down 1.4% against the euro, sinking under €1.083.
It is unclear what will calm investors’ concerns if there is anything at all. Huge stimulus packages have already been announced, and no doubt there will be plenty more to come. Yet, baring the anomaly of yesterday’s CPFF reveals from the Fed, nothing has had a sustained positive impact on trading.
A recession at this point is inevitable. But there are recessions and there are recessions, and questions over what exactly will be left in the economic rubble of the coronavirus crisis appear to have put the fear of god in investors.
"Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved."