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Wall Street collapses again 4.5% in a scenario of high volatility and uncertainty

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Wall street widens its falls and collapses more than 4.5% after closing the session on Tuesday with a 5% rebound, in a scenario of very high volatility and uncertainty, caused by the expansion of the coronavirus in Europe Y U.S. We remind you that, due to the change in time in the US, the American stock market opens at 14 Spanish time and close at 21 hours This week and the next.

The number of people affected by the coronavirus worldwide now exceeds 100,000 and, only in the US, they are more than 1,000 The infected. The fear of a recession is increasingly real and markets thus begin to discount it.

The Petroleum he opts again for the hard falls and yields almost 4% in the case of West texas, up to $ 33.03, after collapsing 24% last Monday and bouncing 8% this Tuesday.

After marking historical lows at 0.32% and picking up to 0.57% on Monday, the 10-year USA bond yield falls to 0.71%. For its part, the ounce of gold rebounds 0.3%, up to $ 1,665; and the euro 0.5% is appreciated and changed to $ 1,1334.

Central banks are increasingly rushing to take action against the outbreak. The last to announce a reduction of emergency types has been the BoE (Bank of England). "We recommend caution to investors, who must remain patient in the face of this market volatility," Baird analysts say.

"We need a significant support for economic activity, especially for small businesses, "Ned Davis Research experts suggest. The president of the United States, Donald Trump, has presented a package of measures to Congress to mitigate the effects of the coronavirus.

The most significant is a zero payroll taxes during 2020, a movement that some experts have considered electoral, in view of his re-election in the November presidential elections.

Within the business front, the virus continues to press the most exposed values ​​such as airlines, and Delta, American Airlines and JetBlue are left on average 2%.

APPLY THE MEASURES NEEDED

The negative response of the market to emergency type trimming made by the Federal Reserve (Fed) stresses that central banks They are not the key actors in the current crisis. The coronavirus "is a shock of offer" and the sanitary measures and specific fiscal policy "They are much more important than monetary ones" to contain and mitigate the economic impact of this crisis, according to analysts of Bank of America Securities (BoA Securities).

The coronavirus is first and foremost a offer shock, which causes a disruption in travel, labor supply and production. "It can also become a shock of demand if revenues and spending fall, but until the supply shock stops, the demand stimulus will not have much impact", they affirm.

Thus, the great risk is that companies and families affected have serious financial difficulties, which can multiply the negative impact, "but that is also best addressed with a specific tax action", they explain. A company that faces a cash flow problem. Therefore, Bank of America Securities states that fiscal measures are needed by governments"better late than never".

DOW JONES ANALYSIS

The Dow jones "he has pulverized the key support of 24,681 points, which confirms the formation of a pull back to the abandoned average of 200 sessions, "says César Nuez, analyst at Bolsamanía.

"This figure is a bearish continuation, so it seems more than likely that we can end up seeing a extension of falls to the level of 21,712 points, minimum of 2018", adds this expert.

To see a sign of strength, we should wait for a close above 26,000 points, prices 9% above ", concludes this expert.

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