A horrorshow US open turned an already very bad day into the kind of session that could go down as historic, if for all the wrong reasons.
It is hard to keep coming up with new metaphors for the scale of disaster facing the global markets. Equities are getting crushed under foot as investors flee to the fire exit, desperately scrambling about for safe havens that feel anything but.
The Dow Jones, already down close to 1500 points on Wednesday night, shed 1850 points as the bell rang on Wall Street, tanking all the way to 21700. This following Donald Trump’s bungled, widely derided and potentially economically catastrophic decision to ban travel from the 26 states that make up Europe’s Schengen Area.
The ECB’s stimulus package seemingly only made matters worse. Withstanding the pressure to cut rates to a fresh record low, the central bank announced an €120 billion expansion to its ongoing quantitative easing program, alongside new longer-term refinancing operations and cheap loans for banks to encourage lending to ’those affected most by the spread of the coronavirus’.
Firmly on the leash of the US indices, the European markets practically doubled their losses once trading got underway across the pond – and when you’re already down as much as 5% that takes you into pretty scary territory.
The CAC shed 10.2% as it tumbled to 4130, while the DAX plunged almost 1000 points to sink towards 9400, leaving it 4400 points off the all-time high struck exactly 3-weeks ago.
The FTSE, on track for its worst session since 1987, collapsed by 9.3%, the UK index now barely above 5300, a price it last struck in the middle of 2012.
Trying to find something worth buying, investors seemingly settled on the dollar. This left cable down 1.6%, forcing it back to a 5-month low $1.2607. Against the euro, meanwhile, the greenback rose 1.2%, forcing the single currency to a 10-day nadir of €1.1135.
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