Futures recover after SP500, Nasdaq join Dow in bear territory - 13.3.2020

SP500, Nasdaq join Dow in bear market

US stock market plunge accelerated on Thursday despite President Trump’s promise of financial relief “for workers who are ill, quarantined or caring for others due to coronavirus,” emergency low-interest loans from Small Business Administration to affected businesses, and deferred tax payments for certain individuals and companies for three months. The S&P 500 lost 9.5% to 2480.64. The Dow Jones industrial average sank 9.98% to 21200.62. Nasdaq composite index tumbled 9.4% to 7201.80. Both SP 500 and Nasdaq Composite joined the Dow in bear market territory, defined as a decline of at least 20% from their recent record intraday maximums. The dollar strengthening accelerated as the Federal Reserve offered some $1.5 trillion worth of funding and announced about purchases of US Treasury notes and bonds to increase its balance sheet: live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.9% to 97.50 but is lower currently. Futures on stock indexes are up.

European indexes’ plunge deepened after ECB decision of no rate cut

European stocks drop accelerated on Thursday after European Central Bank decided not to cut interest rates. ECB’s announcement of new measures to support bank lending, including expansion of its quantitative easing (QE) program by 120 billion euros ($135.28 billion), wasn’t sufficient to stem selling pressure . Both EUR/USD and GBP/USD accelerated their declines yesterday with both pairs higher currently. The Stoxx Europe 600 index lost 11% led by travel and leisure shares. Germany’s DAX 30 slumped 12.24% to 9161.13. France’s CAC 40 tumbled 12.28% while UK’s FTSE 100 fell 10.87% to 5237.48.

Australia’s All Ordinaries Index rebounds while Asian indexes fall

Asian stock indices are mostly lower today after steepest losses on Wall Street since the Black Monday crash of 1987. Nikkei ended down 6.1% at 17431.05 despite continued yen decline against the dollar. Markets in China are falling: the Shanghai Composite Index is down 1.2% and Hong Kong’s Hang Seng Index is 1.2% lower. Australia’s All Ordinaries Index however rebounded 4.4% with Australian dollar little changed against the greenback.

Brent rebounds

Brent futures prices are recovering today. Prices accelerated declines yesterday : May Brent crude lost 7.2% to $33.22 a barrel on Thursday.

Gold gains as Dollar slips

Gold prices are edging higher today. Prices fell sharply yesterday: spot gold fell 3.0% to $1589.3 an ounce on Thursday.