(17 March 2020)DAILY MARKET BRIEF 1:Markets running on fumes, as virus-infected data pours in.

S equities rebounded past 3% after the Dow closed 12.93% lower, the S&P500 and Nasdaq tumbled 11.98% and 12.32% in the worst sell-off since 1987. The Fed’s 100-basis-point cut was fully bypassed by the market. Riksbank expanded its support package by SEK 300 billion additional asset purchase and the Bank of England (BoE) said it is ready to take prompt action if needed. But what small and medium size businesses need is cash poured directly in, without passing through the financial system.
Hence, governments around the world are seeking other measures to calm down the markets’ nerves. The UK promised extra help for businesses battling the virus-led slowdown, and temporary business shutdowns. France pledged to allocate 300 billion euros of bank loans to companies hit by the pandemic. Spain banned short selling for a month to contain the heavy volatility that may cause additional damage to the financial system.

Trading in Asia was mixed. The ASX 200 bounced 5.83%, Nikkei (+0.57%) and Hang Seng (+0.75%) recorded timid gains, as stocks in South Korea (-2.38%) and Taiwan (-2.26%) continued their journey south.
FTSE (+2.46%) and DAX (+2.22%) hint that there could be a recovery at the open.

But gains we see across the board remain very fragile as stocks are running on fumes after a month of hefty collapse. And there is more to worry about, as we start seeing the impact of coronavirus outbreak via tangible economic data.

By Ipek Ozkardeskaya