Equity markets were marked by wild upside and downside swings this week, moving in a completely random pattern and furiously rejecting all
support from governments and central banks.
At this point no one can really explain why the markets behave the way they do, and what may
be next. The only thing we can say is this high volatility is bad, whether it is positive or negative.
US stock indices continue setting
the global sentiment. The Dow (-3.58%), the S&P500 (-3.39%) and Nasdaq (-3.10%) slumped again on Thursday, sending Asian equities
tumbling on Friday. Nikkei slid 2.72%, as the ASX 200 and CSI 300 lost 2.81% and 1.62% respectively.
FTSE (-1.95%) and DAX (-2.20%) are
set for heavy losses at the open, as well.
The name of the sell-off: coronavirus, again. Infections approach 100’000 and there is no
positive news regarding a vaccine just yet. In between, the virus continues taking lives with first fatalities announced in the UK and
Switzerland, and paralyzing life in other places. Schools and offices in Italy are closed, people are asked to work from their homes.
Bulk
holiday cancellations, significant drop in all-purpose travels added to anxiety of disrupted supply chains and rumours that China may be
lying about the resumption of activity explain why the issue goes beyond governments’ and central bankers’ control this time.
Safe
haven capital pile into gold, yen and Swiss franc.
By Ipek Ozkardeskaya
