Wednesday review: 11.03.2020

Wednesday review: 11.03.2020

Yesterday evening, The World Health Organization announced that Coronavirus is now pandemic. Italy, where deaths rose by nearly a third overnight, has shuttered all shops except supermarkets, food stores and pharmacies.

As expected, it was a tough punch for U.S. markets. Losses accelerated after WHO made an official statement, ending the longest bull market in U.S. history and sending the USA30 into a bear market for the first time since the 2008 financial crisis.

The USA500 has a drop of its major components bigger than 21%.

President Donald Trump banned all flights coming from 26 European, except the U.K. for a month as a safety measure to prevent the virus from spreading even more.

Jan Loeys and Shiny Kundu from J.P. Morgan, said in a note that "the deflationary shock that we had assumed would trigger a U.S. entry into the zero-yield world is turning out to be a combo of trade war, oil price war and COVID-19 virus".

Major indices dropped drastically, around 20%, exiting the ongoing 11 year bull market, and sliding rapidly into bear market territory:

USA30 fell more than 5.6%, and a total of 20% below its recent highs

USA500 fell 4.9%

TECH100 fell 4.7%

As of today, Thursday, European markets are getting beaten with Germany30 on -6.7%, France40 on -5.4%, Italy40 on -5.5%.

Now, all eyes are on the European Central Bank. Analysts expect a 10-basis point cut from ECB monetary meeting taking place on March 12.


Sources: nasdaq.com, investing.com, cnn.com, forbes.com

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