- Stocks collapsed on Monday, global stocks fell and bond yields fell sharply as investor fears about the spread of the coronavirus intensified and oil prices plunged as producers quarreled over the a way of reducing production and increasing prices as demand weakened.
- Coronavirus update: the number of confirmed coronavirus cases worldwide has increased to 111,354, according to the Johns Hopkins Center for Systems Science and Engineering, and the deaths are 3,892. The United States has 566 cases of viruses and the deaths have risen to 22.
- The energy sector is the day’s stock of real money as oil prices plunge and Saudi Arabia and Russia have been fighting over production cuts.
The stocks were halted shortly after the opening bell on Monday, after tripping of the circuit breakers once the S&P 500 fell 7%.
After trade resumed, the Dow Jones Industrial Average fell 1,913, or 7.4%, to 23,950, the S&P 500 fell 7.23%, and the Nasdaq fell 6.91%.
With global coronavirus infections exceeding 111,000 and the number of Covid-19 coronavirus deaths just below 4,000, global investors can no longer ignore the impact of the virus on the global economy.
The fall in the global market was further compounded on Monday by a dramatic drop in government bond yields. The yield on the 10-year US Treasury benchmark fell to an all-time low of 0.318% overnight in one of the biggest declines since the financial crisis. At the last check, the yield was 0.42%.
Investors were betting Monday that the Federal Reserve will have to cut rates by an additional 75 basis points when it meets next week in Washington – after last week’s 50 basis point cut – to boost the economy American against the destruction of Covid-19.
International benchmark Brent crude prices fell nearly 20% Monday morning to $ 36.64 a barrel and West Texas Intermediate crude fell 20% to $ 32.96 a barrel after failed talks between OPEC and Russia and Saudi Arabia launched a price war and promised to increase production to increase market share.
“The collapse in the price of oil adds a new dimension to fear and uncertainty. You really couldn’t make a worse combination for uncertainty,” said David Bahnsen, chief investment officer of Bahnsen Group. “The markets should not only worry about the impact on capital spending and the credit markets, but frankly, they must be wondering what the (Putin’s) angle really is (Russian President Vladimir).”
The sharp drop in oil prices on Monday – the worst since 1991 – followed drops of more than 10% on Friday after the failure of OPEC talks, cartel leaders and non-member allies such as Russia not having deepened the pact on production reductions, but also allowed their current which expires daily 1.2 million barrels of the market.
Saudi Arabia, in what many analysts see as a tactic designed to punish Russia for its failure to support OPEC’s proposal, has started to cut prices as demand weakens as economies slow in the midst of the coronavirus crisis.
Shares of the major oil companies Exxon Mobil XOM, Chevron CVX and BP ((BP) – Get a report plunged on Monday as crude prices fell. Marathon Petroleum ((MRO) – Get a report declined xx and Occidental Petroleum ((OXY) – Get a report also strongly collapsed.
The number of confirmed coronavirus cases worldwide has increased to 111,354, according to the Johns Hopkins Center for Systems Science and Engineering, and the deaths amount to 3,892.
The United States has 566 cases of the virus and deaths have risen to 22.
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