(04 March 2020)DAILY MARKET BRIEF 1:Mixed sentiment following Fed cut.
US equities tanked 3% following a surprise 50-basis-point cut from the Federal Reserve (Fed) yesterday. It appears that the move rather
frustrated investors who were expecting a more creative, or impactful action than a simple rate cut, which they thought wouldn’t remedy to
disrupted supply chain problems. We have a real issue here: investors are expecting central bankers to become the heroes that they are not
meant to be.
Meanwhile, G7 ministers’ pledge to give the necessary support to fight back the coronavirus shock on the economy didn’t charm
investors either.
Flight to safety gained momentum. The US 10-year yield dived below the 1% mark for the first time in history. Gold
rebounded to $1652 per oz.
But sentiment in Asia was somewhat better.
The Dow, (+1.58%), S&P500 (+1.43%) and
Nasdaq (+1.51%) futures bounced higher.
Nikkei (+0.08%), Hang Seng (+0.15%) and Shanghai's Composite (+0.63%) recorded timid gains,
as stocks in Sydney (-1.71%) lagged despite a better-than-expected GDP growth in Australia in the fourth quarter.
By Ipek Ozkardeskaya
