Never seen before! Dow fell nearly 1900 points in two days and US bond yield hit a new low

category:Finance
 Never seen before! Dow fell nearly 1900 points in two days and US bond yield hit a new low


Three major U.S. stock indexes opened higher and fell lower on Tuesday, as the market continued to focus on the potential impact of international public health events on the global economy. CDC officials suggested that the risk of the outbreak in the country triggered market panic. By the end of the day, the Dow was down 879.44, or 3.15%, to 27081.36, the Nasdaq was down 2.77%, to 8965.61, and the S & P 500 was down 3.03%, to 3128.21. The CBOE panic index, VIX, jumped 11.27% to 27.85, breaking the 30 mark at its highest level in the session.

At present, the Dow and S & P 500 index have retreated nearly 8% from their historical highs, the Dow has fallen below the 200 day line for the first time since August last year, and the NASDAQ has dropped 8.9% from its February 19 high. According to bespoke investment group, the S & P 500 index has fallen more than 3% for two consecutive trading days, the last time during the financial crisis in November 2008. The Dow fell nearly 1900 points in two days, setting a record.

The novel coronavirus pneumonia is not too early to be considered, and the situation is rapidly evolving. It will continue to observe the epidemic, for example, the prospect is still clear, and the policy will remain at the right level. The U.S. economy and policies are in a good position, and the employment market is relatively strong. The Federal Reserve focuses on a wide range of financial data, not just the stock market.

U.S. national economic adviser kurdallo said he didnt think the Fed would make any panic moves, and he didnt hear any news about the Feds interest rate cut. Novel coronavirus pneumonia can help us to help us in the second half of the year. Investors should consider buying stocks, such as the worsening of the new crown pneumonia, and the United States will be prepared.

Fed watch, a CME interest rate observer, said the market expected the fed to cut interest rates 59.8% in April and at least twice a year.

Funds poured into US bonds to avoid risks. The yield of two-year US bonds closely related to interest rates fell 3.9 basis points to 1.227%, and the yield of benchmark 10-year US bonds fell 2.5 basis points to 1.352%, once reaching a historical low of 1.307%, while the yield of 30-year US bonds fell 1.5 basis points to 1.821%, breaking the 1.80% mark for the first time in intraday history. Financial sectors came under pressure, with Bank of America down more than 5%, JPMorgan down 4.5%, Citigroup and Wells Fargo down 4.3% and 2.7%, respectively.

Disney after hours fell 2.5% after the company announced that Bob Iger would step down as its chief executive officer and continue to serve as its chairman, and Bob chapek, chairman of Disneyland and experience, would take over as the chief executive with immediate effect. In a statement, Mr. Igor said it was the best time to transition to a new CEO as Disneys consumer business started again and the integration of 21st century fox was underway.

Tesla fell 4.06% and missed the $800 barrier. The company has started sending e-mails to customers of model y vehicles to inform them that the delivery is about to be completed. It is expected that the delivery date of the first batch of model y will not be earlier than March 15, 2020.

Chip stocks generally fell, Meguiar technology fell 5.29%, NVIDIA, Kelei and Scarlett news fell more than 4%, AMD, application materials, Qualcomm, Broadcom, Intel, etc. fell more than 3%.

Analyst point of view

Art Hogan, chief market strategist at national securities, said the volatility is normal. Whats terrible is that the stock index has fallen so fast from its historical high. When the outside world doesnt understand the seriousness of the event and generates speculation, the markets response becomes like a bottomless hole.

Jan Hatzius, chief U.S. economist at Goldman Sachs, cut his forecast for U.S. gross domestic product growth to 1.2% from 1.4% and said the outbreak would further affect the U.S. economy. Until the epidemic is contained, the risk is clearly on the downside. More and more enterprises expect that if the negative impact of the supply chain continues into the second quarter or later, they may face production difficulties.

Mohamed El Erian, Allianzs chief economic adviser, said investors should delay buying stocks hit hard by the epidemic. This time around, public health events tend to damage corporate earnings and economic growth for longer than a fundamental recession. Just because bargain hunting has been successful in the past doesnt mean it will be the same this time.

Gold profit taking as crude oil continues to decline

International oil prices hit a two-week low three times a day. Investors are worried about the outlook for global crude oil supply and demand and OPECs production reduction. By the end of the day, WTIs main crude oil contract was down 3.0% to $49.90/barrel, while Brents main crude oil contract was down 2.4% to $54.95/barrel.

Saudi energy minister Abdul Aziz said world energy demand will continue to grow and expressed confidence in OPEC + cooperation. The OPEC plenary meeting is scheduled to be held in Vienna from March 5 to 6 to determine the future of the production reduction agreement, which expires at the end of March. Saudi Arabia, Kuwait and the United Arab Emirates are reported to have discussed a total reduction of 300000 barrels per day of crude oil if Russia does not assist in further production cuts.

Germanys commercial bank said OPEC + actually needs to cut production by a larger margin, but there is a doubt that Russia and Saudi Arabia can reach an agreement due to the decline in crude oil demand. Previously, the market thought that OPEC + would eventually achieve a temporary production reduction of 600000 barrels per day, which led to the recovery of oil prices, but now this uncertainty disappointed the market.

The international gold price has weakened sharply, and the market shows obvious signs of profit taking. As of the close, Comex gold fell $26.60, or 1.6%, to $1650 / oz in April.

European stocks open higher and go lower

Europes three major stock indexes accelerated their decline towards the end of the day. Market sentiment was depressed. As of the end of the day, the pan European Stoxx 600 index fell 1.76% to 404.60, the FTSE 100 index fell 1.94%, to 7017.88, the DAX30 index in Germany fell 1.88%, to 12790.49, and the CAC40 index in France fell 1.94%, to 5679.68. Tesco, a British retailer, fell 2.5% as it sold the remaining 20% of its Chinese joint venture to China Resources and pulled out of the Chinese market for u00a3 275 million. Novel coronavirus pneumonia is a new Italy city. Kong Te, Prime Minister of Italy, said Tuesday that the country is still a safe tourist destination. The latest data show that 322 cases of new crown pneumonia were confirmed in the country. The novel coronavirus pneumonia case was also announced in Switzerland and Austria. Banier, the EUs chief negotiator for brexit, issued an ultimatum to British Prime Minister Johnson, warning that no trade agreement would be reached unless the UK agreed to the EUs demands on fair competition and fishing. A trade agreement will be linked to a fisheries agreement and a level playing field, otherwise no agreement will be reached at all, banier said. Source: First Financial Editor: Yang bin_nf4368

Europes three major stock indexes accelerated their decline towards the end of the day. Market sentiment was depressed. As of the end of the day, the pan European Stoxx 600 index fell 1.76% to 404.60, the FTSE 100 index fell 1.94%, to 7017.88, the DAX30 index in Germany fell 1.88%, to 12790.49, and the CAC40 index in France fell 1.94%, to 5679.68. Tesco, a British retailer, fell 2.5% as it sold the remaining 20% of its Chinese joint venture to China Resources and pulled out of the Chinese market for u00a3 275 million.

Novel coronavirus pneumonia is a new Italy city. Kong Te, Prime Minister of Italy, said Tuesday that the country is still a safe tourist destination. The latest data show that 322 cases of new crown pneumonia were confirmed in the country. The novel coronavirus pneumonia case was also announced in Switzerland and Austria.

Banier, the EUs chief negotiator for brexit, issued an ultimatum to British Prime Minister Johnson, warning that no trade agreement would be reached unless the UK agreed to the EUs demands on fair competition and fishing. A trade agreement will be linked to a fisheries agreement and a level playing field, otherwise no agreement will be reached at all, banier said.