The Wall Street's major indexes crashed for the sixth straight session this week. The S&P 500 stock index lost almost 500 basic points by plunging near to 15% below the level of its February 19 record close and confirmed its fastest correction in history, according to S&P Dow Jones Indices analyst Howard Silverblatt. The previous record was about a 12% fall for nine days in early 2018, but it was "only" 345 basis points at that time. The markets were spooked by a proposed slowdown in the Chinese economy then.
GBP/USD traded above 1.30 on Tuesday, which was the day when a press conference where chief EU's negotiator Michel Barnier was present, took place., Today's picture is different. The Sterling retreated to lower levels under 1.2930. Yet, the British currency has generally received a certain fundamental ground from the very fact that the 27 countries of the European Union were able to agree on a common position in post-Brexit trade talks, which are expected to resume next week.
The recent drop in the world's stock indexes by four to five % is associated with the "second wave" of the spreading of the coronavirus. The "lesions" caused by the spread of the virus went far beyond the epicentre - mainland China - and are affecting the heavily populated and industrial regions of Europe, especially Italy, and regions in Korea and Japan are also being affected. The fears that the effects of the virus on the world economy, world's production and trade are triggering investment risks. Such risks are in place and they are huge.
The Stoxx Europe 600 index on Monday had its biggest one-day loss since June 2016, just after it reached its fresh all-time highs last week. The French CAC40 and the Deutsche Xetra DAX 30 indexes performed in a similar manner, while the FTSE MIB in Milan was the main loser among all European indexes with a fall of5.43% on Friday's closing, due to numerous messages related to the spread of the coronavirus in Northern Italy.
The Machinery Orders released by the Government of Japan this week showed a disturbing -3.5% year-to-year decrease and a truly frightening -12.5% monthly drop in December after the indicator was on a negative side during the five of the last six months, excluding one inspiring jump by +18% in November.
Gold prices on Thursday went sky high after breaking through the nine-year resistance level of $1612 toz. The last time gold futures temporarily jumped to this level was this January amid the US-Iran military tensions. At that time gold jumped due to the extreme risk of the large-scale military outbreak. Now it is different: markets are more or less quiet and have turned to a positive outlook, despite the coronavirus uncertainties.
The UK labour data and inflation figures initially boosted the British Pound in the first half of the week, but all the positive effects disappeared as the EU ambassadors failed to agree on the approach to be used in the so-called "level playing field" from which mandatory conditions in post-Brexit trade talks could be created by the side of continental Europe.
The global high technology Nasdaq 100 stock index completely evaporated the effect of Apple's mini-shock exposure. The futures on the Nasdaq 100 survived safely after a quick sell-off to the 9525 points level during the early Asian hours on Tuesday and posted a new all-time high of around 9650 in the afternoon. The S&P500 index, which includes more "real economy" companies, had a harder impact, but it has also recovered around ten points from the 35 points which were lost the day before.
The decline in Asian stocks forced Wall Street indexes to retreat from record highs. The US market was closed on Monday since the United States celebrated the President's Day related to George Washington's birthday, but the American stock indexes futures yesterday traded higher on world markets because of the clearly positive Asian dynamics. The dispositions changed dramatically on Tuesday to a negative picture, straight from the early hours of the day.
The upcoming week may be busy for the British Pound. A set of U.K. labour market statistics is due to be issued on Tuesday, including the data about employment changes and jobless rates for December 2019, plus wages growth dynamics. Inflation data will be coming out on Wednesday, while the retail sales and the industrial trends orders, which will be released by the Confederation of British Industry (CBI), plus the Purchasing Managers' Index (PMI) will complete this everyday information stream from the United Kingdom.
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- UK PM Johnson's spokesman: Downing Street remains fully operational; PM is not on ventilator, is receiving oxygen
- U.S. job openings decrease in February, hires edge down
- Canada's purchasing activity decreases much more than anticipated in March
- UK construction work declines at the steepest rate since April 2009 - IHS Markit/CIPS