The U.K. Stock market
- The U.K. and European markets fell heavily again this week as fears increased over the economic impact of Coronavirus. Markets will most likely need to see evidence that the coronavirus is being contained before there is a convincing rally.
- The Bank of England announced a further rate cut to 0.1% and an additional £200 billion asset purchasing programme. The ECB launched PEPP, Pandemic Emergency Purchase Programme, and gave the commitment this would be “as much as necessary and for as long as necessary”.
- Both our Breadth indicator and our Momentum indicator stayed negative this week.
The U.S. Stock market
- The U.S. stock market had another week of steep falls with the Dow heading back to late 2016 levels. This was despite the Fed announcemnet on the previous Sunday that it would cut rates again and restart a huge program of asset purchasing.
- The VIX Volatility index hit its highest recorded level early in the week, above that seen in 2008, and trading circuit breakers were triggered to try and restore orderly trading.
- The price of oil fell to its lowest level for nearly two decades and many economists predict a recession in the U.S. is imminent.
- Our Breadth indicator stayed negative and our Momentum indicator ticked lower.
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