Thursday did not start well in Asia: the most important stock indexes were all in the red when the Swiss stock exchange opened in Zurich. The Swiss Market Index (SMI) also lost a lot of ground, closing in the evening down 3.14 percent, around 319 points lower. Ultimately, there was a real massacre and panic sales in the USA.
The diver on Wall Street was triggered by a gloomy economic assessment by the US Federal Reserve and the fear of a second wave of corona. The US leading index Dow Jones Industrial slumped 6.90 percent on Thursday. With 25,128 points, he found himself at the level of the end of May. This was the largest percentage daily loss on a closing price basis since the black week in March. In the meantime, the Dow would have almost dropped below the 25,000 mark. In the end, the market-wide S&P 500 fell 5.89 percent to 3002 points.
New lockdown expected in America
Fed chairman Jerome Powell (67) had already found clear words in the middle of the week in view of the severe economic crisis resulting from the corona pandemic. He said that a significant portion of the job losses could be permanent. In addition, there were new infection numbers: In some southern US states such as Florida and Texas, new infections rose again. “We expect some corona restrictions to be reintroduced in some cities or states in the coming weeks,” said the British analyst company Pantheon.
In this environment, many investors continued to cash in. The Dow had only climbed to the highest level since the end of February with 27,580 points. That was an increase of more than 50 percent since the Corona crash low in March. Quite a few stockbrokers had already spoken of an overheating of the market due to the cheap money flood of central banks, which had nothing to do with the real economic outlook.
The tech-heavy Nasdaq 100 had even climbed to a record high and now fell by 5.01 percent to 9,588 points. The Powell statements now seem to have brought investors back somewhat to reality. (nim / SDA)