China News Service Client, Beijing, April 22 (Xie Yiguan) Although the US Senate reached a new round of bailout agreement on April 21, local time in the United States, the epic crash of crude oil put pressure on the financial market and US stocks suffered for two consecutive days. The agency believes that the current decline in the stock market is far from reflecting the true state of the market. From the historical experience, the market may fall even lower.
The picture shows the Dow trend throughout the day.
Crude oil crash caused US stocks to plummet
Before the US stock market, international oil prices reappeared in a cliff-like decline, and WTI crude oil futures contract in June fell more than 40%. Under the influence of the decline in crude oil futures, US stocks opened sharply lower, and the intraday Nasdaq fell more than 4%.
On the afternoon of the 21st, Eastern Time, the US Senate voted to pass an epidemic rescue plan of about $ 484 billion, of which $ 310 billion will be used to provide funds to small businesses affected by the epidemic. In addition, the plan will provide US $ 75 billion in funding for US hospitals and US $ 25 billion for expanding new coronavirus infection testing-related projects. Next, the House of Representatives is expected to vote on the bill this Thursday.
However, the preliminary achievement of the epidemic rescue plan did not stop the decline of US stocks. As of the close, the Dow fell 631.56 points, down 2.67% to 23018.88 points, and fell over 1200 points in two days; the S & P 500 fell 86.60 points, down 3.07% to 2736.56 points; the Nasdaq fell 297.50 points, down 3.48% to 8263.23 points.
Energy stocks fell across the board, Exxon Mobil fell 0.51%, Chevron fell 2.36%, ConocoPhillips fell 3.96%, Schlumberger fell 3.42%, EOG Energy fell 1.58%.
Crude oil futures plummeted and US stocks fell. On the 21st, the main stock indexes in European stock markets closed down sharply. The German DAX index fell 3.99% to 10249.85 points; the French CAC40 index fell 3.77% to 4357.46 points; the British FTSE 100 index fell 2.96% to 5641.03 points.
International oil prices failed to recover from the decline on Tuesday. June WTI crude oil futures in the United States fell by 8.86 US dollars, or 43.37%, to close at 11.57 US dollars per barrel. $ 6.5, a record low in the session. Brent crude oil contract fell 24.4% in June to $ 19.33 per barrel, the lowest since 2002.
US President Trump said on social media on the 21st that he had issued directives to the Department of Energy and the Ministry of Finance to require the two departments to formulate a bail-out plan for the US oil and gas industry to ensure the safety of these "important" companies and related positions.
The continued plunge of US crude oil futures also set off a high tide of market hedging, and the yields of US Treasuries were mostly lower on Tuesday. Gold prices are under pressure, "cash is king" repeats, the dollar rose strongly, and in late New York, the dollar index rose 0.25% to 100.2209, and non-US currencies fell across the board.
Data map.
Institution: the market may fall even lower
According to data from Johns Hopkins University in the United States, as of 17:38 U.S. Eastern Time (5:38, Beijing 22nd), the number of newly diagnosed cases of new coronary pneumonia in the United States increased to 820,104 cases and 44,228 deaths.
Kevin Hassett, the White House economic adviser, said on Tuesday that the current negative oil prices were caused by "very short-term events" (the New Crown Virus pandemic). The decline of US GDP in the second quarter may be the biggest decline in history.
Oakland Capital founder Howard Marks said in an interview with CNBC on Monday that there was a clear disconnect between the US stock market's strong rebound last week and the reality after the outbreak. "Compared with the historical high of February 19th, US stocks have only fallen by 15%, but in my opinion, this is far from reflecting the heavy damage to the economy since the outbreak." He also pointed out that from historical experience , The market may fall even lower.
Mark Hackett, director of investment research at Nationwide, said market turmoil is still fierce because subtle changes in the tone of the news have driven sharp changes in investor sentiment. "The market hopes that the worst outbreak has passed and the market has rebounded sharply. As the economic reopening is triggering heated debate, this optimism may face resistance."
Zhu Min, the former vice president of the International Monetary Fund and the dean of the National Finance Institute of Tsinghua University, pointed out that one thing is clear. The epidemic is still developing and may also deteriorate. So the stock market will continue to adjust to the epidemic. The rebound of the stock market is only a supporting effect on the stock market after the central bank dispatches liquidity. It does not mean that the stock market has begun a real rebound. (Finish)