The U.K. Stock market
- Rapidly increasing concerns that the coronavirus could develop into a global pandemic caused a severe decline in equities this week and stock markets, including the UK, entered “correction” territory (a fall of more than 10% from recent peaks).
- Italy moved quickly to contain Europe’s largest outbreak, and many towns were sealed off. ECB officials in Italy urged governments to take the lead should the impact on economic grpowth deepen.
- ECB President Christine Lagarde said the ECB was monitoring the outbreak “very carefully”.
- Our Breadth indicator is negative and our Momentum indicator ticked lower.
The U.S. Stock market
- The U.S. stock market suffered its worst weekly decline since the global financial crisis on news that the coronavirus had spread outside of China and growing fear of a global recession.
- Stock markets fell more than 10% from recent peaks and therefore entered “correction” territory. The VIX Volatility Index spiked to almost 50 on Friday, its highest reading since 2008.
- The Fed released a statement stating that the outbreak was posing “evolving risks” and promised that they would “act as appropriate to support the economy.”
- Our Breadth indicator turned negative and our Momentum indicator ticked lower.
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