Dusseldorf The fear of bigger ones economic damage from the rapidly spreading corona virus continues to burden Wall Street. Of the Dow Jones index falls 4.4 percent to 20,943 points. The broader S&P 500 slips 4.4 percent to 2470 points. The technology-heavy Nasdaq Composite gives 4.4 percent to 7360 meters.
“The warning from US President Donald Trump about upcoming horrible weeks and up to 240,000 deaths in the coming months depresses the mood on the market,” said investment strategist Kit Juckes from the bank Societe Generale. Trump also warned the population to strictly follow public restrictions for another 30 days.
“Talking of a stock market bottom still seems remarkably premature given the continued rise in infection and death rates in Europe and the United States,” said Michael Hewson, senior market analyst at CMC Markets in London.
This view is shared by other stock market experts such as fund manager Jeffrey Gundlach. In his view, the recent highs should not be reached for a long time, on the contrary: He even expects new lows on the US stock exchanges. “I also think in April this feeling of panic will come up again ”said the CEO and chief investment officer of Doubleline Capital.
Large US banks’ forecasts that the US economy will quickly recover from the coming recession are too optimistic. The current general economic situation is reminiscent of a depression.
The total volume of US economic stimulus and monetary support measures is expected to reach $ 10 trillion, Gundlach expects. The US unemployment rate will rise to ten percent, and the dollar will lose value as government debt escalates.
The labor market service provider ADP reports one with minus 27,000 digits surprisingly small decline in jobs in the private sector. A drop of 150,000 jobs was estimated. Still, it’s the first drop since September 2017.
This is due to the exit restrictions in connection with the Covid 19 spread. “It is not yet clear to what extent the virus will affect the labor market,” said the analysts at Landesbank Helaba. However, the indication for the official report next Friday is negative. A massive rise in the unemployment rate is to be feared in the coming months.
Look at the individual values:
Macy’s shares fell 9.8 percent to $ 4.43. The papers of the US department store chain fall out of the S&P 500 index and will in future only be represented in the S&P small-cap 600. Since the beginning of the year, the paper of the chain, which has been suffering from customer loss for some time, has lost around 70 percent due to the corona crisis. Since the record high of $ 73.60 five years ago, the market value has shrunk by more than $ 20 billion.
The US printer manufacturer Xerox in the middle of the corona virus pandemic refrains from the planned hostile takeover of the computer company HP. Xerox described the move on Tuesday night as disappointing, but necessary to focus on addressing the corona crisis. Xerox had offered $ 35 billion for HP.
Xerox stocks lost seven percent in response to this decision, while HP stocks fell 14 percent.
The withdrawal is considered a victory for HP boss Enrique Lores, who had rejected the takeover offer published for the first time in November as too low.
Xerox’s business is under pressure during the crisis. The value of the stock has halved in the past five weeks, while HP’s share certificates have fallen by around a quarter. HP benefits from the trend towards home office.
At T-Mobile US and Sprint on the other hand, you have reached your goal: After a two-year tremor, the merger of the mobile operators is in a dry cloth. Investors reacted relieved in both cases, the papers became winners against the weak market with 1.5 and 2.1 percent respectively.
The title of the hotel operator Marriott slipped 7.6 percent. Reason: There was a data leak, about 5.2 million customers are affected.
They also flew out of the depots Petroleum values. In addition to virus worries, they suffered from the price war of the two important export countries of Saudi Arabia and Russia. This caused US inventories to swell more than three times as expected last week. In return, the price of the US oil grade WTI fell by up to 2.8 percent to $ 19.90 a barrel (159 liters). It was about half a dollar above its 18-year low from last week.
This affects shale oil producers in particular because, according to experts, they only work profitably from a price of around $ 50 due to the complex fracking process. With Whiting Petroleum, the first company from this group had to apply for bankruptcy protection. The stock then plummeted by about half.
The aircraft manufacturer’s papers too Boeing it was hard again, with a price slide of more than twelve percent they became a noticeable burden in the Dow, where they still belong to the heavyweights.
With agency material.
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