{"id":167957,"date":"2020-04-02T07:05:43","date_gmt":"2020-04-02T11:05:43","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=167957"},"modified":"2020-04-02T07:05:43","modified_gmt":"2020-04-02T11:05:43","slug":"market-turmoil-resumes-as-virus-fears-deepen","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/04\/market-turmoil-resumes-as-virus-fears-deepen\/","title":{"rendered":"Market turmoil resumes as virus fears deepen"},"content":{"rendered":"
April 2, 2020<\/div>
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By Hussein Sayed, Chief Market Strategist (Gulf & MENA), ForexTime<\/a><\/strong><\/p>\n

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Investors have suffered a tough start to the second quarter due to the coronavirus pandemic. After climbing 17.9% from its low in the past seven trading days, the S&P 500 kicked off the new quarter with a 4.4% decline.<\/p>\n

It seems most of the global fiscal and monetary stimulus measures have been priced in and the things that matter most at this stage are the infection and death rates of Covid-19.<\/p>\n

Psychology has a great impact on asset prices, and with more people realizing that the virus could reach them in some way or have already infected someone they know, that\u2019s a good enough reason for explaining why risk assets are unloved.<\/p>\n

The upward move in equities we\u2019ve seen over the past week may prove to be a temporary recovery, a dead cat bounce or a bear market rally. Call it whatever you like, but as long as infection rates continue to grow at the current pace, this more or less guarantees weak economic performance going forward and a collapse in earnings.<\/p>\n

With global infections likely to reach one million later today and deaths surpassing 50,000, investors are focusing on capital preservation and are looking to return to cash. That suggests another leg lower in equity prices over the next couple of weeks, until investors have a better understanding on how the current crisis will end.<\/p>\n

Of course, no one knows with certainty how bad this pandemic will impact global economies and corporate earnings. But it is obvious that corporate buybacks, a major component of the past decade\u2019s bull market, will be missing in 2020 and probably in 2021 depending on how long the crisis persists. These buybacks have been by far the greatest course of demand for stocks since the 2008 crisis.<\/p>\n

While some investors may want to take this opportunity of extreme pessimism to begin accumulating stocks, they may soon realize that we haven\u2019t reached the capitulation stage yet. That is when investors surrender or give up trying to recapture lost gains as a result of falling stock prices and is generally considered to be a sign of a bottom in prices.<\/p>\n

Today\u2019s US weekly jobless claims release for the week ending March 28 is going to be of more importance than Friday\u2019s non-farm payrolls report. That\u2019s because the NFP will only include data through March 14, so it doesn\u2019t reflect the impact of the last two weeks when millions of Americans filed for unemployment benefits.<\/p>\n

Jobless claims may have risen 3 \u2013 5 million in the past week, and we could even see a higher revision of the last week\u2019s 3.28 million print. That suggests April\u2019s NFP may show job losses in 8 digits, which could turn out to be the darkest day ever in the US job market.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Disclaimer: <\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n<\/div>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Hussein Sayed, Chief Market Strategist (Gulf & MENA), ForexTime Investors have suffered a tough start to the second quarter due to the coronavirus pandemic. After climbing 17.9% from its low in the past seven trading days, the S&P 500 kicked off the new quarter with a 4.4% decline. It seems most of the global […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-167957","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/167957","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=167957"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/167957\/revisions"}],"predecessor-version":[{"id":167964,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/167957\/revisions\/167964"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=167957"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=167957"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=167957"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}