Wall street anticipates falls of 1% after the latest measures announced by the European Central Bank (ECB), Federal Reserve (Fed) and other central banks, like the Australian RBA, to try to alleviate the dire economic impact of the coronavirus. The ECB surprised last night with a new € 750 billion asset purchase program to try to ease financial tensions in the eurozone. The new program has been called the Pandemic Emergency Purchase Program (PEPP), a Pandemic Emergency Purchase Program.
The Fed also made late-night movements, which announced a new Money Market Mutual Fund Liquidity Facility, or FMLM, to help money market funds meet the demand for redemptions by households and other investors.
"The market reaction to stimulus efforts reinforces our vision that the worst is not over yet"says Charalambos Pissouros, chief analyst of the JFD Group." We repeat that with monetary and fiscal flexibility, lConsumers have to leave their homes and start spending for the engines of the world economy to restart. With infected cases and daily deaths reaching new records day by day, we see that as a very difficult task, "adds this expert.
The New York Stock Exchange closed last day with falls of 5.5% for fear of the coronavirus, although in the worst moments of the day the Dow Jones 10% plummeted. On Monday, the drop exceeded 12%, the second largest in history, only surpassed by the crash of 1987.
This Tuesday closed with a strong rebound of more than 5%, but sales have returned aggressively. From its mid-February high at 3,393 points, the S&P 500 has plummeted nearly 30%, in one of the most vertical bear markets in history.
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