Market Summary: The long and the short of it.
Stocks finally woke up from their complacent march higher and began to catch down to the reality in the bond, currency, and commodities markets. The reality that the corona-virus has not evaporated but instead virus counts have exploded higher, rattled global investors on Monday. Investors that had assumed that this crisis would be largely confined to China have been proven wrong. At this point, we have already seen significant outbreaks erupt in several other countries in Asia. In fact, there are now eight other nations where “community spread” is taking place…Japan, Singapore, South Korea, Taiwan, Thailand, Vietnam, France and now Italy.
As we mentioned several weeks ago…“ The perspective and assessment of the horizon (“cognitive eyeballing”) are distorted. Investors no longer seem to be able to properly assess the risks ahead and have become insensitive to them. However, these risks are real…”
Asia
Asian Markets opened up the new trading week and dove into the red. The Chinese Shanghai Composite ironically finished the day with the least amount of damage …closing down -0.28%. Hong Kong’s Hang Seng finished down -1.79% while the Japanese Nikkei dropped a staggering –3.35%.
Europe
The European markets were all clubbed in Monday’s trading, all finished sharply lower with shares in Germany leading the continent. The DAX was down a whopping -4.01% while France’s CAC 40 was off -3.94% and London’s FTSE 100 was lower by -3.34%.
Americas
North and South American markets finished broadly lower yesterday with shares in the U.S. leading the region. The S&P 500 was down -3.35% %, finishing near session lows to mark the largest one-day decline since February 2018 and erase the year-to-date gains on the broad average. Mexico’s IPC was off -2.20% and Brazil’s Bovespa was lower by -0.79%.
U.S. Treasuries continued their ominous rally, leaving the 10-year at 1.36% and the 30-year at 1.83%, each a record closing low. Crude Oil (WTI) fell back towards $51 a barrel. Gold and Silver continued their rallies amongst the doubt in the markets, Gold closed up another 1% at $1,660 an ounce while Silver pushed towards $18.60 an ounce. Bitcoin took it on the chin today dropping below $9,600, while the Fear Index (VIX) exploded higher by +46% to close at 25.03.