- Australian Stocks Surge to Start the Day
- Wall Street Looks to Recover from Monumental Losses
- Recession Fears Persist in US and UK
There is no hiding the fact that yesterday trading in the US compounded days and weeks of a downward spiral. It was the worst day since “Black Monday” of 1987 for all of the major indexes. Markets are waking up in the West though to at least a small piece of positivity in the fact that markets in Australia rallied well throughout the day. This will need to have a global domino effect though if it is to boost markets and stave off recession around the world.
Australia Sets a Fighting Tone to Global Market
Australian markets were some of the first in the world to wake up on Tuesday morning, and in more ways than one. From having lost close to 10% yesterday, they manages to claw back at least some of that amount. In the process they have posted some of the biggest one day gains in the markets history. The S&P/ASX 200 closed almost 6% higher on the day.
This number, and confidence in the market may well have been boosted by the Reserve Bank of Australia’s move to cut its cash rate by 25 basis points. The current mark of 0.5% now marking a record low for the rate. Despite this, the AUD/USD forex market was down 1.7% at the time of writing. Elsewhere on the Asian markets, news was more of a mixed bag, with the Philippine’s actually halting trading. This followed a market fall of almost 8%.
Similar Bounce Expected in US Markets
Monday was the third-worst day on record for the major markets in the US. All three major indexes plummeted at least 12% with several pauses in trading caused by the sheer volume of panic in the market. The volatility overnight was also very clear.
The country wakes up in a more positive, yet cautious mood today though. The confidence of President Trump in the markets, although not backed by its action, has never shaken. This remains steadfast today and market indications in the early hours seem to be pointed upwards. At least a 2% opening rise is anticipated, and the powers that be are certainly hoping for this positivity to carry through the day.
Improved Stimulus May Not Save Recession as GBP Flounders
The Federal Reserve have so far tried their very best to inject confidence into the market from all angles. This was underscored by recent rate cuts in particular. Added to that are new proposals from former Presidential candidate and senator Mitt Romney to provide each American with a $1,000 payment to reduce their burden in these difficult time. These do not seem to have provided any answers, or additional confidence.
Across the pond, the GBP/USD market is also taking a hammering which is in a large part driven by the indecisiveness of PM Boris Johnson on the national virus response. This has seen the market fall to $1.22, its lowest point in 5 months.[table “14” not found /]