Chinanews client Beijing, March 12th (Xie Yiguan) Beijing time on Wednesday, 11th, it is another hard night for investors in Asia, the European epidemic has further deteriorated, and the World Health Organization announced that the new crown pneumonia epidemic situation has Features of the pandemic. Many countries announced interest rate cuts and introduced economic support policies to deal with the impact of the epidemic.
The financial market continued to stage a "roller coaster" market. After "Black Monday", it made a big comeback on Tuesday. However, it suffered another severe setback on Wednesday. The US stock market fell into a technical bear market "overnight bungee jumping". Many domestic and foreign institutions believe that the 11-year bull market in US stocks may end.
The decline of major US stock indexes.
US stocks plunge again, Dow falls into technical bear market
On Wednesday (March 11), U.S. stocks opened lower and moved lower, and then suffered another severe setback. The Dow slumped 1444.94 points and entered a technical bear market.
At the close, the Dow fell 1649.94 points, or 5.86%, to 23553.22 points; the Nasdaq fell 392.20 points, or 4.70%, to 7952.05 points; the S & P 500 index fell 140.85 points, or 4.89%, to 2741.38 points.
Large technology stocks were lower across the board, with Apple down 3.47%, Amazon down 3.75%, Nai Fei down 3.9%, Google down 5.04%, Facebook down 4.46%, and Microsoft down 4.53%.
Financial stocks fell broadly, JPMorgan Chase fell 4.72%, Goldman Sachs fell 6.78%, Citigroup fell 8.62%, Morgan Stanley fell 6.71%, and Bank of America fell 4.02%.
Energy stocks fell, Exxon Mobil fell 3.29%, Chevron fell 2.21%, ConocoPhillips fell 6.65%, Schlumberger fell 4.45%, and EOG Energy fell 6.44%.
Most popular Chinese stocks also closed down. Alibaba fell 3.74%, JD.com fell 0.65%, Baidu fell 3.27%, Xin Er Fu fell 42.22%, Wanda Sports fell 13.62%, Weibo fell 4.88%, and Pinduo fell 6.98%. Weilai Automobile fell 5%.
European stock markets and crude oil futures rose first, then fell, playing a "roller coaster "
From the perspective of global financial markets, on the 11th, factors such as the increase in US domestic crude oil inventories for the seventh consecutive week and Saudi Arabia ’s increase in production put pressure on oil prices. On the 11th, international oil prices rose first and then fell. NYMEX crude oil futures closed down 3.61% to 33.12 US dollars per barrel, while cloth oil fell 3.71% to 35.84 US dollars per barrel.
New York crude oil futures price chart.
After Saudi Aramco increased its supply to 12.3 million barrels per day on Tuesday, it announced on Wednesday that it had received instructions from the Saudi Ministry of Energy to increase the company's maximum sustainable production capacity (MSC) from 12 million barrels per day to 13 million barrels per day. The US Energy Information Administration (EIA) report on Wednesday showed that US crude oil inventories increased by 766.4 million barrels last week, exceeding expectations.
On the same day, the three major A-share indexes, the Nikkei 225 Index, the Korea Composite Index, and the Hong Kong Hang Seng Index all closed down. European major stock indexes also showed weakness, opening higher and lower. The British FTSE 100 closed down 1.40%; the French CAC40 closed down 0.57%; the German DAX closed down 0.35%.
The major European stock indexes rose or fell.
European Central Bank President Lagarde said that due to the new crown pneumonia epidemic, Europe is facing the risk of a crisis like 2008 and warned EU leaders that the economy will suffer a great deal and urgent measures need to be taken now.
On the 11th, the Bank of England suddenly cut interest rates by 50 basis points. The Bank of England said it announced the decision to fight the epidemic and would take further steps to support the UK economy. The new SME loan scheme can provide more than 100 billion pounds of loans for four years.
German Chancellor Angela Merkel said the country would take all necessary measures to mitigate the economic impact of the new crown pneumonia virus.
Some economists predict that the European Central Bank will lower its policy rate by 10 basis points at its meeting on Thursday to curb the drag on the financial situation caused by the appreciation of the euro.
Data Map: New York Stock Exchange.
Why have US stocks continued to fall and have not bottomed out yet?
As of March 11, the Dow has fallen 17.47% since 2020, a cumulative decline of 20% compared to the highest point on February 12, and the Dow has entered a technical bear market. Why has the US stocks not bottomed out?
According to US media reports, the performance of the stock market that day indicates that investors believe that the US government has not taken sufficient measures to deal with the impact of the new crown pneumonia epidemic, whether it is the epidemic itself or the impact of the epidemic on the economy.
According to CNN reported on the 11th, according to statistics from the Centers for Disease Control and Prevention, states and local health agencies, 1,162 cases of new crown pneumonia have been confirmed in the United States, and 37 people have died.
On the 11th local time, Washington, DC issued a statement announcing a state of emergency. As of now, 23 states, including New York, Washington, Massachusetts, and Washington, DC, have declared a state of emergency.
The World Health Organization Director-General Tan Desai said on the 11th that the new crown pneumonia epidemic has been characterized by a pandemic. CNN reports that US Senate Democratic Leader Chuck Schumer is preparing to ask President Trump to issue a national emergency statement on the new crown pneumonia epidemic.
Analysts said that it is impossible to predict the duration and spread of the new coronary pneumonia epidemic, and the resulting uncertainty will continue to bring turbulence to financial markets.
Dow Jones chart.
US stocks fall, the Federal Reserve wants to "backfire " ?
Economist Alan Blinder said on the 11th that the US economy may have fallen into recession due to the economic slowdown caused by the fear of the new crown virus. Zhu Chaoping, a global market strategist at JPMorgan Asset Management, said that under the dual impact of the epidemic and oil prices, the debt risk of American companies may be exposed, which will increase the risk of deleveraging and economic recession.
On Wednesday, the Federal Reserve Bank of New York issued a statement saying that it would further raise the upper limit of the amount of funds provided by the overnight repo operation from $ 150 billion just after raising it on Monday to $ 175 billion. In addition, the Federal Reserve extended its $ 45 billion two-week repurchase program and added a $ 50 billion one-month repurchase program.
According to the Washington Post, US President Trump has urged US Treasury Secretary Mnuchin to pressure Fed Chairman Powell to seek Federal Reserve stimulus measures.
On the 10th, US President Trump tweeted that the Fed raised interest rates too quickly and cut interest rates too slowly. The Fed should reduce interest rates to those of rival countries. The Fed needs to be a leader, not a follower it has been playing.
The Federal Reserve will hold a meeting next week, and the market generally expects that the Federal Reserve will cut interest rates again. Goldman Sachs chief economist Hazus said in a report to customers that the Fed is expected to cut interest rates by 50 basis points during the March interest rate meeting and cut interest rates again in April to bring interest rates back to 0% to 0.25%. Historical low.
But Citibank believes that the actual effect remains to be seen, as historical experience shows that similar interest rate cuts may make investors more cautious.
"Outbreak + oil price war" to end U.S. stock bull market?
A number of Chinese and foreign institutions predict that under the influence of the epidemic situation, the US stock market bull market may be coming to an end.
"In the short term, because overseas epidemics are still serious, the stock market may continue to fluctuate for a period of time. If the epidemic severely affects the US economy and even triggers the debt crisis, then this will mean the end of the super bull market for US stocks." Pan Xiangdong told reporters that, even if there is no epidemic, the US economy is at the end of the economic cycle, and US stocks are facing greater adjustment pressure.
"The outbreak of the epidemic has become the cause of the end of the 11-year U.S. bull market." CITIC Securities pointed out that the current economic and profit data still do not fully reflect the impact of the epidemic. The value of the "double kill" pattern.
Goldman Sachs chief US stock strategist David Kostin said that the longest-running bull market in American history will soon come to an end and that US stocks will experience greater losses than in the past three weeks. Goldman Sachs estimates that the mid-year target for the S & P 500 is 2450, which is 15% lower than the closing price on the 10th and 28% lower than the previous high. (Finish)