Bloomberg
Published Mar 12, 2020 09:38AM ET
(Bloomberg) --
The rout in global stocks deepened after the U.S. and European policy responses to the worsening spread of the coronavirus rattled investors pining for more. Treasuries and haven currencies rallied.
U.S. equities plunged 7%, triggering a NYSE circuit breaker that halts trading for 15 minutes for the second time this week. Futures also fell 7% and were halted. European stocks tumbled more than 8%. The 10-year Treasury yield slid to 0.65%.
President Donald Trump’s travel ban and tepid fiscal measures sparked the latest leg down in risk assets, while the European Central Bank failed to stem the rout after it left rates unchanged, though it temporarily increased its QE program and took steps to boost liquidity.
On another bruising day across markets:
Trump unveiled steps including lending aid for small businesses and asked Congress to pass undefined payroll-tax relief, but his Oval Office address gave the market little confidence that the U.S. is tightening its grip on the virus or its economic impact. The World Health Organization earlier called the outbreak a pandemic and other countries, such as the U.K., have taken more extreme measures to try to blunt the threat to growth.
“Market moves suggest monetary stimulus has reached its limits,” said Lucas Bouwhuis, a portfolio manager at Achmea Investment. “Most of the stimulus needs to come from the fiscal side and we are just not seeing enough of that yet.”
Meanwhile, signs that companies in the hardest-hit industries were drawing down credit lines to battle the effects of the virus on their businesses added to anxiety.
“The market will need much more to get its confidence back,” said Mohit Kumar, managing director at Jefferies International Ltd. “The economic slowdown is because consumers won’t spend as they don’t go out or travel -- you can’t make them spend by giving cheaper money. What you need is fiscal stimulus.”
These are the main moves in markets:
Stocks
Currencies
Bonds
Commodities
Written By: Bloomberg
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