At 8:41 p.m. Beijing time on March 16, about 50 minutes before the opening of the US stock market, US President Trump issued a tweet: "God bless the United States."
Soon after, the U.S. stock market opened directly to the circuit!
This is the fourth circuit breaker in the history of the US stock market since the introduction of the circuit breaker mechanism in 1987, and the third circuit breaker in the past week, following March 9 and 12.
At 21:30 beijing time on the 16th (9:30 a.m. EST on the 16th), the Dow Jones index opened down 2250 points, down 9.78%, and is now trading at 20935 points; the NASDAQ fell 6.12% to 7392.73 points; and the S&P 500 index fell 7.47% to 2490.47 points.
Five minutes before the U.S. stock market opened, Brazil's ibovespa index fell 12.5% at the open, triggering a circuit breaker. 10 minutes after the opening (9:40), the Canadian s&p/tsx composite plunged 12.5%, triggering a first-tier market circuit breaker and suspending trading.
As of Sunday (15th), there were 169,000 confirmed cases of covid-19 worldwide, of which 87,464 were confirmed outside China, surpassing China for the first time. In the United States, 3774 cases were confirmed and 69 deaths were confirmed. President Trump declared a state of emergency on the 13th, and Illinois, New York, Los Angeles and other places have announced the closure of bars, restaurants and other public places.
On the 15th, the Federal Reserve suddenly cut interest rates by 100 basis points on a rare scale, sharply reduced the target range of the federal funds rate to 0-0.25%, and launched a $700 billion quantitative easing program. However, market confidence has not yet recovered, and on the 16th, European stock markets opened down, and US stock index futures fell to a halt. Analysts believe that investors are worried that the above measures will still not be able to hedge the impact of the new crown pneumonia epidemic on the US economy.
Singapore's fund management company Azure Capital CEO Terence Wong said that the Fed's second interest rate cut this month on the 15th was not widely welcomed and seemed to be a "sign of despair" for investors.
"They basically ran out of ammunition in three weeks. There is nothing left, and monetary easing can no longer be used as a policy. ”
Globally, panic sell-offs made a comeback on Monday, with European stocks opening low and European Stock 50 futures widening to 6 percent. France's CAC40 index extended its decline to more than 10 percent, the lowest since 2013.
As of 18:00 Beijing time on March 16, britain's FTSE 100 fell 6.15%, France's cac40 fell 8.77%, and Germany's dax fell 7.81%; the panic index vix futures fell to more than 30%. Brent crude oil fell to 10% at $31.58 a barrel; wti crude fell 9.13% at $30.21 a barrel.
European and American bank stocks fell across the board: JPMorgan chases down more than 14.19 percent before trading, Bank of America down 15.73 percent, citigroup down 16.63 percent. The U.S. Financial Services Forum announced on Sunday that eight member units, including JPMorgan Chase, Morgan Stanley, Bank of America and Citibank, will stop buyback operations by June 30 this year.
In European stocks, Deutsche Bank fell more than 8%, and Societe Generale (16.210, -0.65, -3.86%) fell more than 9%. U.S. cruise concept sector pre-market declines widened: Carnival Cruises fell 19.91% before the session; Norwegian cruises fell 11.53%, Caribbean cruises fell more than 14%; U.S. auto stocks generally fell before the market: Tesla expanded to 12.55%, General Motors, Ford fell nearly 10%.
In East Asia, the Hang Seng Index extended its decline to 4.1%. The three major A-share indexes plunged sharply in the afternoon, with the ChiNext index closing down 5.9%, falling more than 6% intraday, and the Shanghai index closing down 3.4%.
The Bank of Japan held an emergency monetary policy meeting on Monday to keep the benchmark rate unchanged at -0.1 percent and announced an increase in easing in the afternoon. However, by the close of the day, the Nikkei was still down 2.5%.
The Bank of Korea then announced an early meeting and announced a 50 basis point cut to 0.75% in the evening local time in response to the COVID-19 pandemic, the first time in The history of South Korea's benchmark rate to fall below 1%.
Rick Laccay, chief investment officer at State Street Global Advisors, believes investors are still digesting the severity of the plunge that is occurring in real time. "It's hard to understand how long this will last."
He said Goldman Sachs, which had previously predicted a 5 percent contraction in U.S. GDP in the second quarter of this year, has now joined in on the market sentiment. Investors are concerned about whether the impact of the crash will continue into 2021.
Joseph Brussula, chief economist at RSM U.S., which provides audit advisory services, said the U.S. market's reaction showed that investors were no longer expecting the Fed and were instead pinning their hopes on a larger stimulus from the federal government.
"Unless they (the government) acknowledge that they understand the scale of this impending demand shock, the market will continue to sell off and more significant liquidity will emerge."
Source: Observer Network