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Donald Trump’s decision distorts markets and air travel

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The President’s decision to suspend European flights to the United States for 30 days due to the coronavirus accelerates the stampede on the financial markets.

Barely open this Thursday at midday, the New York stock exchange collapsed with a drop of 7.29% in the Dow Jones and 6.66% in the Nasdaq. the towings were immediately suspended

Same thing this Thursday morning in Europe. Paris, London, Frankfurt, Brussels, Milan and Madrid … european scholarships all lost more than 5% by midday. In Paris, the Paris Stock Exchange lost more than 10%. The Cac 40, the star index which was 6,000 points at the start of the year, is now approaching 4,300. A fall of almost 30% in just two months. It’s a real crash, further reinforced with the american decision to ban flights from Europe for one month.

The Asian stock markets had started the movement tonight with a loss of 4.4% in Tokyo and 3.6% in Hong Kong. The oil markets are also at half mast with a 5% drop in the price of crude, to 34 dollars per barrel.

Oil prices have also sharply gone into the red because the suspension for one month of flights from Europe to the United States means a drastic drop in consumption of black gold, already at half mast.

Read also : Riyadh and Moscow engage in an oil war against a background of coronavirus

Air sector on the brink of disaster

In Europe, the values ​​of the airline and hotel sector are literally plunging. Air France lost more than 10%, Airbus 8%, Luftansa and British Airways both 11% less. The aviation sector will be affected by this slowdown in travel. Okay, the hotel giant lost 6%.

The French company operates 120 flights per week to the United States (not counting those of its partner Delta). Its leaders meet this Thursday afternoon to decide whether or not to continue flights to the United States as of the entry into force of the sanctions tomorrow Friday at midnight. French Minister of Economy Bruno le Maire said he was extremely vigilant regarding the situation of the airline.

The ECB prepares to act

Bank values ​​are also falling sharply, pending decisions by the European Central Bank to help businesses. Decisions to be announced this Thursday afternoon.

the European Central Bank has said it is ready to act. But its monetary support for the economy seems to have reached its limits. After the financial shock of 2008, the guardians of the euro continued to act on key rates to get the euro zone out of the crisis.

This time, they could follow the Fed, but also other central banks, which have cut their rates in recent days. Problem: the main rate of the ECB is zero, and the one hitting the deposits entrusted by the banks is already negative. Currently set at minus 0.5%, it could eventually drop to minus 0.6%.

But this will not be enough. The ECB could call on states to act. Political, and in particular budgetary, instruments seem essential to help companies facing partial unemployment or cash flow problems. In a teleconference with EU heads of state and government, ECB President Christine Lagarde warned that monetary policy measures can only be effective with the contribution of governments.

The shock wave of the coronavirus health crisis is therefore global and investors are panicking. Global exchanges need reassuring signals. But for the moment, the exact opposite is happening.

To read listen: Coronavirus: overview of the pandemic in the world


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