US, WASHINGTON (ORDO NEWS) — European stock markets again fell sharply on Monday, as the exceptional new monetary measures announced by the Federal Reserve and the mega-support plan of the German government were not enough to reassure the markets against the magnitude of the economic shock caused by the coronavirus pandemic.
In Paris, the CAC 40 posted a decline of 3.32% (134.49 points) to 3,914.31 at the close. In London, the FTSE 100 lost 4.34% and in Frankfurt, the Dax fell 2.1%.
The EuroStoxx 50 index lost 2.47%, the FTSEurofirst 300 4.32% and the Stoxx 600 4.3%. The latter thus erased most of the rebound initiated over the previous two sessions.
At the time of closing in Europe, Wall Street was also moving in the red, the Dow Jones abandoning 1.18%, the Standard & Poor’s 500 1.13% and the Nasdaq Composite 1.4%. The Dow briefly fell below 18,500 points for the first time since November 2016.
As the coronavirus pandemic continues to spread across all continents and its balance sheet continues to rise, Germany has presented a plan to support the economy, the total amount of which, credits and guarantees combined, could exceed 750 billion euros.
The Fed has unveiled new measures and an unprecedented device to support credit to businesses and households.
But Congress and the White House are still struggling to agree on a fiscal stimulus package.
“It is encouraging to see the Fed act quickly by providing essential support to sectors of the market and the economy under stress,” said Anna Stupnytska, Director Macro at Fidelity International. “But these efforts must be matched by much larger budgetary packages, which will also have to support the economy in the current crisis but also – and this is important – during the recovery.”
“If the US economy is to be able to emerge from the current crisis and recession without too many consequences, more radical interventions will be needed in the months to come,” she added.
In Europe, the fall did not spare any sector, the most marked declines affecting the transport and tourism sector (-7.67%), that of food and drinks (-5.61%) and that industry (-6.08%).
Safran (PA: SAF ) (-13.84%) and Airbus (PA: AIR ) (-13.77%) show the largest declines in the EuroStoxx 50. The aircraft manufacturer has suspended its forecasts, renounced its proposal dividend and increased its available credit lines by 15 billion euros.
Among the rare increases in the CAC 40, Total (PA: TOTF ) gained 6% after the announcement of a reduction in its investments and the freezing of its share buybacks.
In Europe, the consumer confidence index for the euro zone was down five points to -11.6 at first estimate and down 4.5 points across the Union to -10.4.
New Fed announcements pushed the dollar, hitherto trending higher: the index measuring the greenback’s movements against a basket of benchmark currencies, which rose by 0.3%, then gave way to ” at 0.8% before erasing its losses.
At the time of the close in Europe, it was almost in equilibrium and the euro was trading up almost 0.4% to 1.0735 after falling below 1.0640 at the start of the day.
The pound sterling continued to fall sharply, by more than 1.4% against the dollar and almost 2% against the euro.
On the bond markets, the decline towards safe havens translates into a drop in US yields: that of ten-year US Treasuries falls by 15 points to 0.761% after a brief drop below 0.7%.
In Europe, that of the German Bund of the same maturity yielded three points to 0.37%.
The multiplication of containment measures, in the United States in particular, continues to weigh on the oil market, crude and refined products combined: Brent drops 4.67% to 25.72 dollars per barrel and American light crude (West Texas Intermediate , WTI) was down 1.46% to $ 22.30.
As for the American gasoline futures contract, it fell more than 20% and registered a new historic low at 0.4676 dollars per gallon.
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The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.