Panic behavior of investors was observed in many markets yesterday. Shares were cheaper from east to west, which translated into huge drops in stock indices, as on the last scale of volatility. In the US, Dow Jones fell by 3.6 percent, the S&P 500 by 3.4, and the Nasdaq by 3.7 percent. The German DAX in turn decreased by 4 percent, and crude oil dropped by 5.5 percent, which was the biggest drop in almost seven weeks.
Monday's panic in many markets today seems to be more controlled, and futures contracts seem to be rebounding. From positive information that may bring respite on the spread of coronavirus, there have been reports of new drugs. The American company Moderna has announced that it released the first batch of mRNA-1273, a vaccine against the new coronavirus, for human use. In Japan, meanwhile, Fujifilm Holdings Corp. increased by as much as 8.8 percent after comments from Japanese Health Minister Katsunobu Kato about country plans to recommend Avigan for coronavirus treatment, according to Bloomberg.
As a result of improved sentiment, futures contracts on the Japanese Nikkei 225 index are rising by more than 2.2 percent today. The Nasdaq 100 is rising by over 1.2 percent and the German DAX by almost 0.8 percent. Crude oil also gains. In turn, the gold, which set a new high yesterday around USD 1700, is rapidly turning back, losing over 2.3 percent.
On the currency market, the situation seems to calm down, although new forecasts appear indicating that the coronavirus's impact on the economies of countries such as Australia and New Zealand will be quite negative. According to bank analysts at Goldman Sachs, Australia's GDP will fall by -0.3 percent on a quarterly basis in the first quarter of 2020. In turn, New Zealand's GDP will shrink by -0.1 percent q/q.
In addition, there may be a recession in Japan after the disastrous data from the fourth quarter of 2019, and then the entire region may be severely affected by the economic slowdown. Nevertheless, the interest rate market shows that the probability of interest rate cuts in Australia is only 7 percent.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
Trade this news from Conotoxia Ltd. platforms
Go to your account
