Can Corona Create Next Crash?
Satendra Singh | Feb 04, 2020 01:00PM ET
I find that the war-like attempts to find causes and control the Coronavirus has resulted in extended volatility in global equity markets on Tuesday and is likely to spread in other markets too like wild fire. There is no doubt that the current rally in global equity markets is the only result of the People's Bank of China’s statement that it will inject a total of 500 billion yuan ($71.4 billion) into the money market to maintain reasonable and adequate liquidity in the banking system during the period of epidemic prevention and control; which helped not only Chinese equity markets to close higher after Monday’s sharp losses but also propelled bullish sentiments in European equity markets too.
On analysis of the movements of S&P 500 Futures, in different time frames, I find that this Coronavirus-resultant move looks not evident enough to impress U.S. equity markets as the exhaustion seems to have stepped in after higher opening on Tuesday. I find that this Corona-created equity bump may be an equally a big slump; which may result in big market jolt up to February 10th, 2020. For watchig my upcoming video, subscribe my YouTube channel 'SS Analysis'.
Finally, I conclude that the China’s decision to inject heavy dose of monetary stimulus might prove one more attempt to extend the pile of debts on economy; which has been constantly bearing the burden of tariff trade tussle since October, 2019. I find that now the Corona looks ready to push the global equity markets toward next Market Crash.
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