Wall street fails to bounce and has continued to fall hard (Dow Jones: -3.04%; S&P 500: -2.93%; Nasdaq: -0.27%) despite the Infinite QE released by the Federal Reserve (Fed) to mitigate the impact of the coronavirus on the American economy. Investors continue to sell despite the New York Stock Exchange recorded its bearish week since 2008, with falls of 17% for the Dow Jones, who lost 20,000 points. From the all-time highs of mid-February, the Dow a has collapsed 37%, the S&P 500 a 3. 4% and the Nasdaq a 30%.
The Federal Open Market Committee (FOMC) of the central bank has decided to amend its asset purchase plan in light of the economic risks posed by the pandemic, so will buy unlimited assets for as long as necessary, as announced this Monday. This is an historic decision that is unprecedented.
At the last monetary policy meeting, which took place on an emergency Sunday, the Fed it lowered the rates to zero and approved to buy 700,000 million dollars. Now, the monetary body that presides over Jerome Powell has announced unlimited purchases and has even been open to buying mortgage debt.
"It has become clear that our economy will face serious disruption"Therefore," aggressive efforts must be made in the public and private sectors to limit job and income losses and promote a rapid recovery once the disturbances diminish, "the entity highlighted.
The Fed has also announced that it will launch a financing program of up to $ 300 billion. As explained, it will support "the flow of credit to employers, consumers and companies by establishing new programs that together will provide up to $ 300 billion in new financing. "These lines of financing are backed by $ 30 billion from the Treasury Exchange Stabilization Fund.
As a negative factor, WashingtonDemocrats have locked for the second time in the US Senate the law of economic stimuli worth $ 2 trillion launched to curb the threat of the coronavirus pandemic. Senators are still working to reach an agreement, as the Treasury Secretary has urgently requested, Steven Mnuchin.
CORONAVIRUS BREAKS OUT IN NEW YORK
Also, another very negative catalyst is that the coronavirus has exploded in NY with more than 15,000 infected, as confirmed by the state governor, Andrew Cuomo. The deceased in that territory, where some 20 million people (about 9 million in New York City alone), they have risen to 114. This region is considered the largest financial and commercial center from the United States as well as their largest industrial center.
In the United States, positive cases have risen to 32,057 and the deceased have gone up to 374. The second most affected state is Washington, with 1,647 cases and 97 deaths, followed by California, with 1,518 cases and 27 deaths.
IMF ANTICIPATES A HARD RECESSION
The managing director of International Monetary Fund (IMF), Kristalina Georgieva, has predicted that the impact of the coronavirus will generate a recession "as bad or worse" than the one that took place as a consequence of the 2008 crisis.
"The global growth forecast for 2020 is negative, with a recession as bad or even worse than the global financial crisis. But we expect a recovery in 2021, "said Georgieva at the end of her participation in the videoconference of the finance ministers and central bakers of the G20 countries.
In other markets, oil West texas up 3% to $ 23.33, the euro appreciates 0.3% and changes to $ 1.0727 and the profitability of 10-year American bond falls 20 basis points, down to 0.74%.
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