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February sell-off

February is a terrible time for stocks, as investors panic about the deadly coronavirus spreading and will impact global growth. Stocks plunged for a seventh consecutive day on last day of Feb, with the S&P 500 index falling about 0.8 percent, bringing its loss for the week to about 11.5 percent. It was the worst weekly decline for stocks since the 2008 financial crisis.

What’s moving global markets this week?

Global stocks started with strong gains in March after central banks assured of policy measures to mitigate the economic impact of the coronavirus outbreak. The stocks even boosted as economic activity has begun to recover in China, travel for tourism and business has slowed sharply and supply chains and manufacturing are under tremendous pressure. The rebounds follow the worst week for major stock markets since the 2008 financial crisis.

 

On Monday equities reversed higher and the S&P 500 rose 4.6%, to close at 3,090. While The Dow gained nearly 1,300 points, its biggest single-day point gains ever. The Dow’s best performers Monday included Apple, Wal-Mart, United Health Group, Microsoft and The Travelers Companies. Apple shares rose by more than 9% after Apple retail stores in China are slowly getting back to business as 38 of the company’s 42 retail stores are now open in an attempt to normalize business despite coronavirus concerns. At the same time, Microsoft shares climbed more than 6% during trading.

On Tuesday, US equities tanked again 3% following a surprise 50-basis-point cut from the Federal Reserve (Fed), The Dow Jones industrial average ended the day down 786 points, or nearly 3 percent and stocks dropped after the Federal Reserve’s emergency rate cut failed to bring calm but later the US equity futures rebounded after former Vice President Joe Biden won a majority of state primaries on Super Tuesday.  

European stocks closed higher on Wednesday, hopes of central bank easing in Europe, along with other measures, helped lift European stocks. Money markets in the eurozone are pricing a 90% chance that the ECB will cut its deposit rate, now minus 0.50%, by 10 basis points next week. Italian stocks closed 0.9% higher as the country prepared drastic new emergency measures to try and slow the spread of coronavirus in Europe’s worst-hit country. The pan-European Stoxx 600 index climbed 1.4%, while the German DAX rose 1.3% and the French CAC gained 1.4%.

Conclusion

As per the recent updates very soon the vaccine will be available for coronavirus. Companies like Gilead (NASDAQ: GILD) to Moderna (NASDAQ: MRNA), have developed coronavirus treatments and vaccines in record time. In another few months, there may be chances for the coronavirus outbreak to be old news. But still no doubt the coronavirus impact the company’s first-half profit growth. According to Gulf brokers, we expect later the third quarter of 2020, global demand trends will recover as a consumer and corporate fear of the coronavirus fades.

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