In addition to Amazons 3.07% increase and Nais 8.24% increase, most large technology stocks ended lower: apple fell 2.12%, Google fell 1.32%, Facebook fell 1.09%, and Microsoft fell 1%. But chip stocks bucked the trend, with western data up more than 10%, microchip technology up more than 9%, Intel up more than 8%, micron technology, AMD and NXP up more than 5%, and Yingwei up more than 3%.
Aviation stocks rose and fell in different ways, with spirit Airlines up more than 13%, United Airlines up more than 7%, Southwest Airlines up more than 5%; American Airlines down more than 1%, JetBlue Airlines down more than 4%.
Whether the fiscal stimulus plan is passed is the key
In less than 24 hours, the US fiscal stimulus bill failed to be voted through twice, although Treasury Secretary manuchin said Congress was very close to passing the fiscal plan and would meet with Senate minority leader Chuck Schumer to reach an agreement. However, investors confidence in reaching an agreement on the stimulus plan has been greatly reduced. Even though the Federal Reserve announced an unlimited asset purchase plan to boost the economy before the market, the failure of the stimulus package vote once again put pressure on Wall Street.
Although the Feds action is a huge boon for the market, the only way for the market to seek sustainable development is to revitalize the economy, said Paul Hickey, an analyst at bespoke investment. If there is no concrete evidence that meaningful progress has been made in controlling the epidemic in the next eight weeks, then there is no way for people and businesses to Normalization of economic activity.
David kostin, an equity strategist at Goldman Sachs, attributes the rapid recovery of the stock market to three factors: how fast the virus can be contained, whether companies will maintain sufficient capital and liquidity for 90 to 180 days, and whether fiscal stimulus measures can steadily increase expectations. He said that if the short-term shutdown leads to enterprise default and permanent layoffs, the damage to the companys profit growth may persist after containing the virus.
Now the Federal Reserve has opened its fire in interest rate policy and QE. On Monday morning, it suddenly announced that it will launch new measures to support the economy, including further asset purchase plans, including the purchase of $75 billion of treasury bonds and $50 billion of institutional mortgage-backed securities every day this week, and the quotation rate of daily and regular repo rate will be reset to 0%. In order to ensure market operation and monetary policy transmission, we will buy US bonds and MBS on demand.
This time, the Federal Reserve no longer gives a ceiling on the amount of bonds purchased, but directly uses the term of expanding its balance sheet as needed. At the same time, in order to ensure market operation and monetary policy transmission, it will not limit the amount of bonds and MBS purchased on demand.
In addition, the Federal Reserve has expanded its intervention in the corporate bond market, increased the purchase of investment grade bonds in the primary and secondary markets, set up two new liquidity tools for corporate bonds, and added commercial loan projects for small and medium-sized enterprises
This also means that the era of unrestricted QE of the Federal Reserve is coming. The U.S. stock market initially reacted positively to the move, but then the gains fell.
The Fed has also expanded its commercial paper facility (CPFF) to include high-quality, tax-free commercial paper in eligible securities at lower prices. In addition, in order to provide short-term funds to the bank, the interest rate of repurchase operation is reduced from 0.1% to 0%, and the operation is carried out once a day.
Peter boockvar, chief investment officer of Bleakley Advisory Group, said: the Feds move on Monday is its most active market intervention so far, and we are once again in an infinite QE cycle.
Chris rupkey, an economist at Mitsubishi UFJ, agrees: Fed policy is doing everything it can to stop the recession. Its not only a low-end lender, but also the biggest buyer. Dont ask how much they will buy. This is infinite QE. Next, it depends on the sincerity of the US governments huge economic stimulus plan.
European stock market continued to fall due to the epidemic
Novel coronavirus pneumonia continued to drag global financial markets despite the fact that the Federal Reserve announced a series of asset purchase plans to support the market, and European stock markets continued to lower on Monday. The pan European Stoxx 600 index fell 4.4%, tourism and leisure fell 7%, while oil and gas shares rose 0.9%.
The FTSE 100 index fell 3.79% to 4993.8, while the French CAC40 index fell 3.3% to 3914.3. Germanys DAX index fell 2.1 percent to 8741.1
Royal Dutch Shell announced it would cut spending by $5 billion in 2020 and suspend share buybacks in response to the recent collapse in oil prices.
IWGs shares fell 17% after the suspension of dividend and share buyback programs, virgin money fell 22%, bioMerieux, a French biotech company, rose 13%, and hellofish, a catering company, rose 7%.
US Federal Reserve expands QE to boost oil market, oil price rises more than 3%
Last weeks sharp drop in oil prices set WTI crudes worst week since 1991. The outbreak of novel coronavirus pneumonia has brought pressure on oil prices. WTI has fallen 43.9% in March, and oil prices have dropped 66.32% from 52 week high.
Extended reading of the U.S. stock market crash big short a month to earn 3400 billion! The US fiscal stimulus bill has twice run aground, and the Federal Reserve has launched six measures to save the economy: the first editor in charge of Finance and Economics: Yang bin_nf4368