Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Health Worries Cause Chaos In Stocks, Dollar Dumps, Gold Jumps

By CMC Markets (David Madden)Market OverviewFeb 28, 2020 06:10
Health Worries Cause Chaos In Stocks, Dollar Dumps, Gold Jumps
By CMC Markets (David Madden)   |  Feb 28, 2020 06:10
Saved. See Saved Items.
This article has already been saved in your Saved Items

It was been a brutal day for stocks as the likes of the DAX, FTSE 100 and the CAC 40 are all showing losses in excess of 2.5%.


The week has been awful for equities as traders are petrified of a pandemic, but today’s session has been the most painful. The fear factor is ramping up and in turn, we are seeing traders drop stocks at an increasing pace. Dealers are rushing for the exit as the chatter about the global economy being hurt because of the coronavirus has risen.

Drax is one of the few gainers on the session as the company confirmed plans to close it coal plants by 2022. The group will focus on biomass energy. The news ties in with the government plans to halt coaling-burning for energy plants by 2025. Energy firms are pushing away from coal as the world is becoming greener. Drax also posted solid numbers today as adjusted earnings jumped by 64% to £410 million, meeting forecasts.

Reckitt Benckiser (LON:RB) shares initially trader higher today despite the colossal £5 billion wrote-down in relation to its takeover of Mead Johnson, the baby formula manufacturer. The group issued a profit warning in October so that took some of the sting out of today’s update. Revenue for the year ticked up 0.8% and the sales outlook for the year is optimistic. On account of the health crisis, the firm has seen a surge in demand for hygiene products like Dettol. The stocks is in the red.

AB InBev (LON:0RJI) warned that first-quarter profit could be hurt by up to 10% on account of the coronavirus crisis. The group relies heavily on China for sales so it is worried about the health situation in the country. The update echoes the warning yesterday from Diageo (LON:DGE).

WPP (LON:WPP) had a soft finish to the end of last year, and the outlook for the year ahead has been revised lower, hence why the stock is sharply down. The advertising giant has struggled to keep up with changing trends in the industry as the likes of Google (NASDAQ:GOOGL) have grabbed some of their business. Today the firm announced a 1.9% dip in like-for-like in net sales for the last three months of the year. The group now anticipates zero growth in LFL net sales for next year. The major decline in the stock price seems excessive considering the middle-of-the forecast.


The negative sentiment continues to hang around Wall Street. The Dow Jones entered corrected territory – a 10% drop from its recent high, and keep in mind it wasn’t that long ago the all-time high was set. The sharp move lower recently underlines how quickly sentiment can change – traders have a herd mentality. The second-estimate of US fourth-quarter growth was 2.1%, meeting forecasts. Durable good showed a 0.2% fall in January, which was a big turnaround from the 2.9% growth that was posted in December, but keep in mind the traders were expecting a 1.5% fall. Pending home sales surged by 5.5% last month, and that tallied up with the robust new home sales from yesterday.

Tesla (NASDAQ:TSLA) shares are down in excess of 8% as new registrations from China tumble. The country in question is a big market for the electric vehicles, so when a report showed the number of registrations in January dropped by 46%, it hit sentiment hard. In light of the nation’s health crisis, the outlook in the near-terms isn’t great either.


The US dollar index has sold-off sharply as there is chatter about the Federal Reserve cutting rates. The economic reports from today were robust, but traders are far more concerned about the outlook for the US economy. There is speculation about the growth rate being impacted because of the coronavirus. Some traders are wondering when will President Trump start demanding lower rates from the Fed, and he does have form when it comes to getting his way. The major move in the greenback has driven up EUR/USD. GBP/USD is a little lower despite the major fall in the US dollar. Sterling’s weakness comes from the news the UK negotiating team might walk away from talks in June, so dealers are dumping the pound on fears of a no-deal scenario post the transition period.


Gold has jumped on the back of the risk-off strategy of traders, as well as the weakness in the US dollar. The big falls in global equity markets have prompted traders to pour their funds into assets that are deemed to be lower risk, such as gold. On top of that, the metal’s inverse relationship with the greenback is helping it too as the softer dollar makes the metal relatively cheaper to buy.

WTI as well as Brent crude have taken another beating on global growth fears. The chatter in the markets about interest rate cuts come from a very bearish place, so traders are taking the view that demand for oil will be severely hit. The energy market can be viewed as a proxy for the perceptions about the global economy, and seeing as dealers are worried about the health crisis dampening growth prospects, it’s no wonder the oil market is feeling the pain.

"DISCLAIMER: CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed.

No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. "

Original Post

Health Worries Cause Chaos In Stocks, Dollar Dumps, Gold Jumps

Related Articles

Ipek Ozkardeskaya
Recession Fears Wreak Havoc By Ipek Ozkardeskaya - Jul 06, 2022

A chaotic trading session yesterday saw a couple of major price levels broken. Crude oil fell below the $100pb support, the EUR/USD sank below 1.03, Cable slipped below the 1.20,...

Health Worries Cause Chaos In Stocks, Dollar Dumps, Gold Jumps

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
Sign up with Email