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31.03 - will Covid-19 kill world economy?

26.03.2019

 

Some recovery. These are the two words that can describe the markets today. We can see that some of the major assets are growing today and that at least some portion of the market is in the green zone. But will it last? We have seen it all before. There is a steep decline, and then a little bit of recovery that is exchanged by a steeper decline. There is not many declined that the economy can take and I fear that we are running out of the safety margin.

 

What’s next? Well. American stock market is pretty stable today and is even growing. That doesn’t mean that American economy is starting to recover. No. In fact, USA is still number one in the world when it comes to the number of registered Covid-19 cases. This can only mean that the USA are far away from the recovery and that the economic impact on the country is going to be tremendous.

 

In the meantime it seems that the USD has not got the memo. American currency is still growing which doesn’t reflect too well on the performance of other currencies like EUR or JPY. People are eager to only invest into something that is going to protect their savings. As a result they are investing into USD regardless of the status of the USA. They just want something concrete and stable and USD hits the spot.

 

What is waiting for us next? Well, a lot of uncertainty and fear. It seems that most of the countries are only getting closer and closer towards the peak, which means that we haven’t seen the worst of the situation just yet. If the situation in USA gets worse and worse and China is already recovering, that means that Chinese economy might become the strongest one in the world. But that is something that we are going to have to see with our own two eyes and ot something that we can predict. But we can think about such a possibility for the nearest future.

 

Here are the main shifts for the day:

 

Topix dropped 2.3 percent.

Kospi added 2.2 percent.

Shanghai Composite recovered 0.1 percent.

Hang Seng from Hong Kong grew 1.85 percent.

S&P 500 futures are lighter by 1.1 percent.

Euro dropped 0.6 percent - $1.0964.

Pound shed 0.2 percent - $1.2391.

Yen lost 0.2 percent – 108.33 per dollar.

Canadian dollar decreased 0.75 percent - $1.4239.

Tesla lost 2.4 percent - $502.13.

Apple grew 2.85 percent- $254.81.

Facebook increased 5.8 percent – $165.95.

Amazon grew 3.4 percent – $1963.95 per share.

Google advanced 3.25 percent- $1146.31.

WTI is heavier by 3.3 percent - $20.88 per barrel.

Brent surged 19.35 percent - $27.13.

Gold dropped 1 percent - $1604.31 per ounce.

Silver plummeted 0.1 percent - $14.03 per ounce.

Platinum added 1 percent – $727.8.

Palladium dropped 0.8 percent - $2298.5 per ounce.