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The financial markets of the Old Continent closed, Wall Street sank after the President of the United States Donald trump It attacked China due to the coronavirus crisis, bringing back bad memories of a damaging trade stagnation between the two countries. At the end of the session, the Dow Jones Index lost 2.5% to 23,723.69 points, the Nasdaq lost 3.2% to 8,604.95 while the S&P 500 lost 2.81% to 2,830.71 points.
Investors were scared by Trump’s comments that additional tariffs could be launched against China in retaliation for managing the COVID-19 pandemic. Trump also claims to have seen evidence linking a Wuhan lab to the contagion.
Wall street has been tested by the announcement of Amazon that you will not make a profit in the second quarter due to the cost of protecting the health of your employees and despite the growth of e-commerce due to the blockade. Even the tech giant Apple, he painted a similar image: increasing income but still decreasing profits.
To weigh the indices, last but not least, the ISM manufacturing index in April, and Moody’s outlook dropped: the ISM index fell to 41.5 last month from 49.1 in March. This is the lowest level since April 2009. A reading below 50 indicates a contraction in the manufacturing sector, which represents 11% of the United States economy. Economists estimated a drop to 36.9 in April.
The drop is less than expected because the index that measures supplier deliveries rose to 76.0 last month, from 65.0 in March. Longer delivery time for suppliers is typically associated with a strong economy and increased customer demand, which would be a positive contribution. But in this case, the slowdown in supplier deliveries indicates a supply shortage linked to the coronavirus pandemic and not stronger demand.
In addition, the news that has influenced, although to a lesser extent Moody’s has cut the outlook for the United States, reducing it from stable to negative: according to the international rating agency, the economic recession will last even beyond the reopening of the closure, while income from income will not begin to grow again until 2022. The dollar also fell against the euro due to Concerns about US economic health. USA and expectations of further monetary easing by the Federal Reserve.
It seemed like a positive day for him oil but it was not so: after a rough start to the session, thanks to the entry into force of the agreement between OPEC and the OPEC + countries to reduce world production and thus rebalance the market, the reverse course of black gold and Wti was below $ 20 a barrel, driven in particular by balance sheets of US oil companies Exxon and Chevron and especially of the discouraging perspectives of the next months.
The pessimism has not escaped even London, the only one open in Europe: undermined by news from Ryanair, which will cut 3,000 jobs to “survive” the air transport crisis and also influenced by Amazon, as well as threats from Retaliation by Trump towards China, the Ftse 100 index fell at the end of the session to 5,763.06 points, with a fall of 2.34%.
