Black swan raid! Global market crash

Britain’s mutant new crown virus “out of control” panic spreads in global capital markets

On Monday, the spread of the British epidemic caused by a mutated virus strain put pressure on many countries around the world. Following the announcement of the suspension of flights and trains from the United Kingdom by the Netherlands, Belgium, and Italy, as of now, more than 40 countries around the world including France and Germany have also taken actions to try to prevent the spread of super-virulent strains. A chill swept across the global capital markets, and the Panic Index (VIX) rose nearly 30%, the highest level since December 14.

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The three major U.S. stock indexes fell across the board at the opening, and travel and leisure stocks were hit hard

In the United States, affected by the intensification of the epidemic, the three major stock indexes fell more than 1% at the opening, and the Dow plunged 400 points during the intraday session. After midday, it was boosted by the constituent stocks and turned to rise. At the close of the market tended to ease, the Dow reported 30216.45 points, a slight increase; the Nasdaq and the S&P 500 fell 0.1% and 0.39% respectively.

In terms of sectors: aviation stocks and chip stocks collectively suffered heavy losses, and travel and leisure stocks sensitive to the epidemic bottomed out. Among them, American Airlines fell more than 4%; Intel, Micron, and Western Digital all fell by 2%. On the other hand, most of the large bank stocks are bullish. Stocks like Goldman Sachs and JP Morgan Chase climbed 4% because the Fed allowed banks to buy back stocks after the stress test. Among the constituent stocks, Nike and Microsoft rose more than 1%.

Tesla officially included in the S&P 500 index, and its stock price fell more than 6% that day

Several stocks have received attention. While Airbnb fell more than 7%, Tesla fell 6.49%. Tesla shares were officially included in the S&P 500 index on Monday, with a closing price of $649.86. Apple’s stock fell 2% at one point after Apple closed its stores in California. After midday, it bottomed out and rebounded, closing at $128.23 per share.

Investors flock to safe-haven assets, international gold prices rise and fall

Analysts interviewed by Reuters believe that risk sentiment is pushing investors toward safe-haven assets such as gold, and the price of gold once rushed to a six-week high ($1,890 per ounce). The price of gold futures on the New York Mercantile Exchange fell back at the close of trading on the 21st, reporting $1,882.8 per ounce, a decrease of 0.32%.

Three major European stock indexes suffered heavy losses

Due to the sudden turn of the epidemic situation in the UK, the three major stock markets opened lower and lowered. At the close of the market, the German DAX index fell nearly 3% to close at 13,246.30 points, a drop of more than 380 points. The UK and French stock markets fell by 1.73% and 2.43% respectively, almost paring back nearly a month’s gains. Banking stocks led the market, causing the European Stoxx600 index to close down 2.3%. In addition, the exchange rate of the British pound against the U.S. dollar fluctuated on Monday, ranging from 1.2% to 2%, and is currently trading at the level of 1.34-1.35.

Russia may support the reduction of production scale, international oil prices plummet

Also affected by the epidemic was the international oil price, which fell below a critical level during the session. At the close of the market, the New York WTI light crude oil for delivery in January next year closed down, with a drop of more than 2%, at $47.74 per barrel. Brent crude oil futures fell 2.58% to $50.91 per barrel.

The latest news shows that although the epidemic counterattack has caused the market to worry about reduced demand in the oil market, Russia said it may support further reductions in production in February, and it is expected to increase production by 500,000 barrels per day. It is not yet clear whether OPEC and major oil-producing countries, Saudi Arabia, support Russia’s position, and oil prices are expected to fluctuate slightly in the short term.

1 Response

  1. Brooke says:

    Futures markets are now pricing in more than half a percentage point more cuts this year.

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