Published On: Wed, Apr 8th, 2020

Dow Jones ‘totally unprepared’ for devastating global economic crisis in months to come | City & Business | Finance

The US is one of the worst hit countries, with coronavirus infecting almost half a million people and killing more than 14,000 others. The US financial hub in New York has become the epidemic for the virus in the states and accounts for nearly half of all COVID-19 fatalities in the nation. The lockdown in New York has sent markets on Wall Street plummeting, with the Dow Jones and S&P 500 both down by around 20 percent in the first quarter of the year.

The Dow Jones Industrial Average, which measures the stock performance of 30 largest companies on the New York Stock Exchange, recorded its single worst-ever trading day last month – dropping by more than 3,000 points.

In March trading was suspended twice on Wall Street as shares continued to be sold in record numbers, sending prices to rock bottom.

In the past two weeks, markets have begun to rally once again as the benefits of the $700 billion pumped into the economy from federal reserves takes fruition.

This morning stocks opened higher after US President Donald Trump said the nation may be getting on top of the “curve” of COVID-19.

Mr Trump also asked Congress for an additional $250 billion in emergency economic aid.

However, Steen Jakobsen, chief economist at Danish Investment banking group Saxobank, has warned the US economy is not ready for the financial fall out of the virus.

He told CNBC: “I still think the market is totally unprepared for what is coming in terms of when we open up.

“The market is celebrating, and very rightly so, that we have a flattening out of the curve right now in terms of people being infected.

“But the real economic drama will be when we get to the other side of this, because opening up will take month upon month.”

READ MORE: Jeremy Corbyn mocked after vowing ‘solidarity’ with Bernie Sanders

The 78-year-old Senator from Vermont has been a champion of free health care for all and would have essentially abolished private insurance.

Stocks in the health care section surged after he dropped out of the race for the White House.

UnitedHealth Group Inc jumped 7.98 percent in the biggest boost to the Dow, while Anthem climbed 10.25 percent.

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