Unheard of in Paris, Milan and Madrid. The worst session since 1987 in London or New York. The panic completely swept away Thursday, March 12 and Friday, March 13, the financial markets, which have visibly lost hope of an effective economic response to the relentless spread of the pandemic of the new coronavirus.
The authorities are however trying to appease investors with thousands of billions, but their lack of coordination seems more worried than reassuring.
Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices adds up: $ 4.7 trillion gone up in smoke on Thursday, or $ 16.1 trillion in market capitalization wiped out since February 19.
The announcement, without consultation, by US President Donald Trump of a suspension of Europeans' entry into the United States for the next 30 days seems to have symbolized this lack of cooperation in the fight against Covid-19. And kicked off the stampede from the markets.
Panic
One after another, European markets posted historic falls on Thursday: worst session in the history of the CAC 40 in Paris (-12.28%), Frankfurt at worst since Reunification (-12.24% ), London which had never screwed up at this point since October 1987. In Milan too, worst drop ever recorded: 16.92%. Madrid dropped more than 14%.
On Wall Street, the Dow Jones also cashed in its biggest tumble since Black Monday in 1987, falling 9.99%.
In cumulative data, the violence of the stock market correction appears even better: the major European markets have plunged by 30% or more since the start of the year.
The flagship index of the New York Stock Exchange has lost 26% of its value since January. At the start of the session on Thursday, the panic was such that trading was suspended for fifteen minutes shortly after opening.
In Latin America, it was also the priest in Buenos Aires as in Sao Paulo, where the stock market finished on a decline of 14.78%.
The Asian stock markets also fell, but less in comparison, Tokyo losing 6.08% and Hong Kong 7% Friday.
Braking never seen
Markets clearly no longer believe in an effective economic and financial response to a pandemic that closes borders, factories, schools, putting a brake on the global economy never seen before.
The scattered stimulus announcements from governments and central banks do not help, nor do the successive containment decisions.
Expected at the turn, the European Central Bank has announced that it will keep its key rates unchanged, while its American and British counterparts have both opted for cuts a few days earlier.
The fact that the ECB did not do the same "speaks volumes about the lack of coordination between the United States and the European Union", comments in a note Sébastien Galy of Nordea Investment.
The institution, however, launched a loan program on Thursday to support SMEs most affected by the coronavirus epidemic, and intends to buy 120 billion euros in additional public and private debt by the end of the year. Not enough to reassure investors.
With AFP
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