Stock markets plunging, companies losing 50% of their value in three months ... The coronavirus health crisis was coupled with a considerable stock market crash that could affect the financial markets for a long time, as Nicolas Barré analyzes in his economic editorial, Thursday morning.
The Covid-19 not only shut down the economy: it caused a global stock market crash.
We can say: Wall Street plunged again Wednesday evening, after the announcement by Donald Trump that the virus could kill 240,000 people in the United States. And especially the first quarter was one of the worst in history with a dropout of more than 20% on Wall Street and 26.5% in Paris for the CAC40. For the record, the Paris stock market index lost "only" 20%, if one can say, in the last quarter of 2008. The market value of the 40 CAC companies dropped by 450 billion euros, that's roughly the equivalent of total state spending. Companies like Renault, Airbus and Société Générale have lost more than 50% of their value in three months.
And it is difficult to say whether this crash will last.
You really have to beware. It is not because we will have reached the peak of the epidemic that the stock markets will start to rise again. The only reasonable attitude, basically, is not to sell your shares so as not to take losses. So it's to wait for the storm to calm down. Certain values have lost much less than the average: this is the case of Air Liquide, which will manufacture respirators on a very large scale. From Sanofi, the pharmaceutical laboratory, or from Carrefour, whose stores remain open. What is certain is that the shutdown of the world economy will be felt for a long time: those who bet on a rebound once the worst of the health crisis has passed certainly take a considerable risk.