This was, perhaps, inevitable. Following Tuesday’s surge – the best since 2008, or even 1933, dependent on where you’re talking – and Wednesday’s follow-up rebound, the markets went in reverse
With fears out an imminent spike in fresh cases in Japan and Hong Kong – two of the countries caught up in the first wave of the virus – prompting a near 900 points slide for the Nikkei and a 175 point drop for the Hang Seng, sentiment took a downward turn during the Asian session.
That fed into the European open, investors unmoved by news that US had finally passed the $2 trillion stimulus package having used up their relief in regards to that issue following the initial agreement announcement.
The FTSE, which had closed only a few points shy of 5700 last night, shed 2.6%, taking it back under 5550. The DAX, meanwhile, shed 200 points as it sunk below 9700, with the CAC tumbling to 4340 following a 100 point decline. The IBEX, interestingly, was on par with these losses despite Spain overtaking China as the 2nd most-affected country in terms of number of coronavirus deaths.
As for what’s on the agenda today, a week on from its emergency rate cut, Andrew Bailey heads up his first (scheduled) meeting as Bank of England chief. FTSE and pound alike are going to be keen to hear whether the MPC has any new monetary policy measures planned.
Turning to this afternoon and the Dow Jones futures are currently pointing to a 340 point plunge when the bell rings on Wall Street, the kind that would stake the index back under 20900.
What the index does do at the open, however, is likely going to be dictated by the day’s unemployment claims reading. An important part of the weekly calendar in the years after the financial crisis, but one that had fallen out of favour recently, you would imagine it is going to return to its status as a crucial economic bellwether in the coming months.
Analysts are expecting somewhere between 1 million to 4 million new jobless claims last week. For context, the week prior saw 281,000 new claims, while the financial crisis record stands at 665,000, a smidge below the all-time 695,000 seen in October 1982 (the records only go back to 1967). Investors, then, could be about to see an absolutely terrifying number.
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