EU markets take a toll as US warns a rise in coronavirus cases

European markets rally as investors eye on lockdown exit strategies

European markets traded lower on Wednesday, April 1, in reaction to U.S. President Donald Trump’s comments that the U.S. will “suffer in the next weeks to come.” The U.S. is estimating deaths over 200,000 from the coronavirus.

Global market pessimism continues immediately after the White House announced that they will have a surge in coronavirus deaths. In a press conference last Tuesday, March 31, Trump addressed the public:

“This could be a hell of a bad two weeks. This is going to be a very bad two, and maybe three weeks. This is going to be three weeks like we’ve never seen before […] When you look at night, the kind of death that has been caused by this invisible enemy, it’s incredible.”

Global tourism, related industries devastated by COVID-19 pandemic

Prediction: US to suffer 100K to 200K coronavirus deaths

In recent data compiled by John Hopkins University, the U.S. has now over 211,000 confirmed coronavirus cases – more than any country in the world.

New York City currently has the largest infected with over 83,000 cases. The White House coronavirus task force is working closely to mitigate the virus.

Dr. Deborah Birx and Dr. Anthony Fauci, comprising the task force, projected the deaths between 100,000 to 200,000. Fauci expresses optimism that the coronavirus mitigation is working, as they are trying to prevent new outbreaks from popping out.

Birx praised California and Washington for acting early in preventing the spread by closing down schools and non-essential businesses.

European markets performing its worst quarter since 2002

On April 1, recently after Prime Minister Boris Johnson halts traders and online sellers from exploiting the ongoing coronavirus pandemic, European markets experienced a heavy beating.

This quarter, the majority of the European stock indices plummeted to more than 20%, the worst quarter it has ever performed since 2002.

20200331 Euro stox indexes Q1 2020

The pan-European Stoxx 600 index fell by 23.03% in its first quarter. Spain’s IBEX 35 and Italy’s FTSE MIB also recorded its worst quarter, dropping 28.94% and 27.46%, respectively.

Analysts say that fiscal stimulus may not be enough

After the European Central Bank (ECB) launched its US$823 billion [AU$1.3 trillion] coronavirus stimulus package last month, investors and analysts are observing the implications that the package will have in the next couple of weeks.

Charalambos Pissouros, a senior market analyst at JFD Group, was against fiscal stimulus measures as he reports:

“In order to change our view, a vaccine has to be ready for distribution, and the vaccine, in this case, is not fiscal spending, neither monetary policy easing.”

Amit Lodha, a portfolio manager of Fidelity International Equities, says investors could be whipsawed by the market volatility. On March 31, he said on a note:

“Medium- to long-term, when the picture stabilizes, we may find ourselves in an environment similar to that in 2009 […] In that recovery, the best thing to do was to sell everything that had been defensive in 2008 — good quality companies with low leverage — and buy everything cyclical that had survived.”

He also cites a possible repeat of a U.S. initiative called the Marshall Plan, which designs to assist in reviving the European economy after the Second World War.

The only way for the world markets to go back on track is if a cure for the coronavirus is found soon.

Micky is a news site and does not provide trading, investing, or other financial advice. By using this website, you affirm that you have read and agree to abide by our Terms and Conditions.
Micky readers - you can get a 10% discount on trading fees on FTX and Binance when you sign up using the links above.