Asian shares and Wall Street futures fell on Wednesday, as growing scepticism about Washington’s stimulus package to fight the coronavirus outbreak knocked the steam out of an earlier rally.
The markets were expecting Trump to come forward with concrete packages. Instead Vice President kiss ass told them to not shake hands
Markets had been recovering from a brutal global selloff on Monday that was triggered by the double shock of an oil price crash and the worsening outbreak. Those gains faded away in Asia, with U.S. stock futures falling 3% and MSCI’s broadest index of Asia-Pacific shares outside Japan down 1.3%. Australian shares were down 3.6%, while Japan’s Nikkei stock index slid 2.27%. Euro Stoxx 50 futures were up 0.17%, but German DAX futures were down 0.2%, and FTSE futures fell 0.56%. Earlier this week, U.S. President Donald Trump said he would take “major steps” to ease economic strains caused by the spread of the flu-like virus. Headlines focused on discussions of payroll tax cut, which helped lift market sentiment.
However, the lack of major announcements since then has left some investors unimpressed.
“We were promised something substantive from the Trump administration, and if it hasn’t come yet at this hour, then it looks like it is being delayed,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“That’s why markets have a negative tone. From a global investor’s perspective, there are still a lot of downside risks.” On Wall Street, all three major indexes jumped nearly 5% on Tuesday, one day after U.S. equities markets suffered their biggest one-day losses since the 2008 financial crisis. The dollar resumed its decline against the yen, the Swiss franc and the euro as uncertainty set in. Market participants largely expect the Fed to cut interest rates for the second time this month at the conclusion of next week’s regularly scheduled policy meeting after surprising investors last week with 50 basis point rate cut.
The euro is also in focus before a European Central Bank meeting on Thursday, where policymakers will face pressure to ease policy after Italy put its entire country on lockdown in an attempt to slow new coronavirus infections. U.S. crude rose 1.37% to $34.38 per barrel, while Brent crude rose 1.96% to $37.95 in a topsy-turvy session. Futures initially jumped on signs that U.S. producers will cut output but then pared gains as the trading day progressed. Many analysts say investors need to remain on guard for further market volatility because the coronavirus still poses a risk to public health in many countries, which could place additional strains on the global economy. Restrictions on movement and factory closures aimed at stopping the epidemic are putting the brakes on global economic activity.