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Market Report 13th March 2020

Market Report 13th March 2020 981 980 Realm
Worst day for equities since 1987 and into bear market territory in the fastest time ever from a high.
  • European stocks moved sharply lower to four-year lows on Thursday after U.S. President Donald Trump banned travel from most of Europe to the United States for 30 days, intensifying investor fears about the economic fallout from the coronavirus.
  • US stocks following the sharp pullback seen in the previous session, stocks showed another substantial move to the downside during the trading day on Thursday. With the sell-off on the day, the Dow recorded its biggest one-day %age drop since the stock market crash of 1987 and the Nasdaq and the S&P 500 joined the blue chip index in bear market territory.
  • Asian stocks tumbled to extend a global rout as fears intensified over the spread of the new coronavirus and its wide-ranging effects on businesses.

Global Macro

  • The European Central Bank approved fresh stimulus measures on Thursday to help the bloc cope with the “major shock” of coronavirus but left interest rates on hold, dismaying markets, and said euro zone governments must lead the pandemic response. With millions of people in lockdown, financial markets in freefall and companies struggling with disrupted supply chains, the ECB said it would give businesses more ultra-cheap loans, raise asset purchases and provide banks with capital relief. The ECB said it would roll out cheap loans for banks, at an interest rate as low as minus 0.75%, and step up bond purchases by a total of 120 billion euros through the end of the year
  • Stocks across the globe and US futures fell dramatically on Thursday after the WHO officially declared coronavirus a global pandemic and as long-awaited US President Trump’s television address disappointed investors. Trump said he would be suspending all travel from Europe for the next 30 days starting Friday, would soon announce emergency action to provide financial relief for workers who fall ill or need to be quarantined and would instruct the SBA to “provide capital and liquidity” to small businesses.
  • Vehicles sales in China tumbled 79% from a year ago to 310,000 units in February 2020, the steepest yearly decline on record, as the coronavirus outbreak hurt demand. Sales of new energy vehicles (NEVs), including plug-in hybrids, batteryonly electric vehicles and those powered by hydrogen fuel cells fell for an eighth straight month. The China Association of Automobile Manufacturers (CAAM) expects that vehicles sales will decrease by more than 10% in the first half of the year, and around 5% in 2020 full year, if the outbreak is effectively contained before April. Vehicle sales will return to normal in the third quarter. 

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