China News Client Beijing, March 28th (Xie Yiguan) After the epic plunge in the previous two weeks, US stocks ushered in a big rebound this week. The Dow Jones Industrial Average rose 12.84%, its largest weekly increase since 1938.

However, on the 27th, the passing of the US $ 2 trillion economic stimulus bill did not bring strong stimulus to the stock market. The news of the British Prime Minister's diagnosis of new crown pneumonia also caused the European and American stock markets to plummet, putting an end to this week's European and American stock markets.

The Dow traded intraday.

U.S. stocks staged a " scary night " again , and the British stock market plummeted

On March 27 (Friday), US stocks opened sharply lower, and the trend continued to fluctuate. After the House of Representatives approved the $ 2 trillion economic stimulus bill, the stock market rallied strongly, but fell sharply in late trading.

At the close, the Dow fell 915.39 points, or 4.06%, to 21636.78 points, ending three consecutive gains; the Nasdaq fell 295.16 points, or 3.79%, to 7502.38 points; the S & P 500 Index fell 88.60 points, or 3.37%, to 2541.47 points .

This week, the Dow Jones Industrial Average rose 12.84%, the largest weekly increase since 1938; the S & P 500 Index rose 10.26%; the Nasdaq rose 9.05%.

On the 27th, large US technology and energy stocks fell across the board, with Apple down 4.14% and Chevron down 9.92%. Boeing tumbled 10.29%, leading the Dow. According to US media reports, US Treasury Secretary Mnuchin said the aircraft maker would not seek government assistance.

European stock markets started unfavourably on Friday. After the news that the British Prime Minister Johnson's new crown virus test was reported positive, the British FTSE 100 index went all the way down. It once fell nearly 7% during the session and narrowed slightly in late trading. At the close, the British FTSE 100 index fell 5.3%, the German DAX index fell 3.7%, and the French CAC40 index fell 4.2%.

European stock markets also rebounded collectively this week. The German DAX index rose 7.9% weekly and the French CAC40 index rose 7.5% weekly, both hitting the largest weekly increase since December 2011, ending a five-week losing streak. The British FTSE 100 index rose 6.2% weekly, the largest weekly increase since December 2016.

The British FTSE 100 index was trading intraday.

The U.S. Economic Stimulation Act has superimposed the effects of the unlimited quantitative easing in the previous period, which has eased market liquidity tensions. At the end of New York on Friday, the US dollar index fell 1.1% to 98.3187, which fell for four days. The biggest weekly decline since March 2009.

Investors' risk aversion is still on the sidelines, with US Treasury yields falling across the board on Friday; COMEX gold futures closed down 0.38% at $ 1,654 per ounce, up 11.41% this week, the largest weekly increase since 2008.

Affected by the Saudi and Russian energy ministers not discussing a joint agreement to reduce production, international oil prices fell across the board on Friday. NYMEX crude oil futures fell 3.36% to $ 21.84 per barrel, down 3.49% this week. Brent crude futures closed down 1.4% at $ 28.25 per barrel, down 2.59% this week.

U.S. stocks still face risk of slump, Wall Street sentiment continues to be tense

The latest data show that more than 100,000 confirmed cases of new coronary pneumonia in the United States have become the country with the largest number of confirmed cases worldwide. Coupled with the sharp increase in jobless claims, investors are concerned about the outlook for the US economy.

Morgan Stanley economists point out that the $ 2 trillion stimulus package is not enough to bring the US economy back to stability. It is estimated that US production losses this year are about $ 920 billion. In the fourth quarter of this year, real US GDP will fall by 2.3% over the same period last year, which is "the lowest level since 2008."

The March University of Michigan Consumer Confidence Index, announced on the 27th, has its largest drop since October 2008 and reached a new low of more than three years.

From March 16, local time, in response to the new crown pneumonia epidemic, New York City has closed all theaters, small theaters, large concerts and other performance venues. The picture shows a theater staff member waving goodbye to Broadway in New York, USA. Photo by Liao Pan of China News Agency

Ken Berman, a strategist at Gorilla Trades, said, "The atmosphere on Wall Street is still tense, and because credit spreads are still large, people have to wonder: how much real buying support is behind the US stock market's rally this week, and how much is triggered by stimulus plans. Short covering. "

OANDA senior market analyst Ed Moya believes that "this week's rally in the stock market seems more like a bear market rally than a confirmation that the market will bottom out."

Maneesh Deshpande, chief U.S. equity strategist at Barclays Bank, said, "After the rebound in U.S. stocks, the medium-term risk has been skewed to the downside. Investors face two other uncertainties, namely the time to contain the economic disruption caused by the virus, and the eventual event Economic losses remain unresolved. "

On March 27, Georgieveva, president of the International Monetary Fund, said that the global economy has fallen into a recession as severe as the global financial crisis, and even worse. "The new crown virus will cause global output to shrink in 2020. The global economy is expected to recover in 2021, but it can only be achieved if the virus is controlled first and the liquidity problem is not paid."

It is worth noting that according to data from Refinitiv Lipper, investors invested $ 259.8 billion in money market funds this week, and the inflows reached a record high for the third consecutive week. At the same time, the outflow of stock funds was US $ 13.7 billion; the outflow of taxable bond funds was US $ 62 billion, and the loss of municipal bonds was US $ 13.7 billion, both of which set a record for two consecutive weeks. This means that a large number of investors sell various assets in exchange for cash to ensure security.

Li Qilin, chief economist and director of the Research Institute of Yuekai Securities, pointed out that the root cause of the liquidity crisis in US stocks has not been resolved. In the case that the epidemic situation has not been controlled, if investors expect further deterioration, U.S. stocks will plunge again, the losses of buyers' institutions will deepen, redemptions will intensify again, and the liquidity problem will become explicit again.

What will happen to the stock market next week? Is it down or up? We will wait and see. (Finish)