Global stocks tumble after dire warnings on virus toll
Adam Samson, Mamta Badkar and Hudson Lockett – Financial Times
A new quarter brought a fresh jolt of volatility to global equity markets on Wednesday, with Wall Street trading lower as the coronavirus crisis worsened in the US and pressure on economies around the world mounted.
The S&P 500 was 3.7 per cent lower by midday. The financial sector and utilities were particularly hard hit in the broad-based sell-off with losses of more than 5 per cent. Meanwhile, the Nasdaq Composite was down about 3 per cent.
London’s FTSE 100 closed down 4.3 per cent while Paris’s CAC 40 was 4.3 per cent lower. The Europe Stoxx 600 fell 2.9 per cent.
Dow caps worst first quarter ever with 410-point drop on continued coronavirus fears
Joe Ciolli – Markets Insider
US stocks declined on Tuesday as traders weighed a longer-than-expected recovery from the escalating coronavirus outbreak.
The losses came as numerous economists across Wall Street further revised their quarterly gross-domestic-product estimates lower amid the pandemic.
US factory, manufacturing data drops most since 2009 on COVID-19
Carmen Reinicke – Business Insider
US manufacturing orders and employment fell the most in 11 years in March as the coronavirus pandemic slowed business activity, signaling an economic contraction.
Institute for Supply Management data released Wednesday showed that the manufacturing index fell to 49.1 last month from 50.1 in February. Any reading under 50 indicates a contraction, or declining activity.
Consumer Confidence Sinks, and the Worst Is Yet to Come
Lisa Beilfuss – Barron’s
A steep decline in Americans’ confidence in the economy during March is a preview of the pain to come as the coronavirus continues to spread and layoffs mount.
The Conference Board, a research group, said its index of consumer confidence slid to 120 in March from 132.6 in February. That is the lowest since July 2017, though it wasn’t quite as bad as economists had feared. Those polled by Bloomberg predicted a decline to 110.
JPMorgan: The best possible outcome for a quick market recovery is shaping up as signs emerge globally
Ben Winck – Markets Insider
An “always hoped-for” V-shaped recovery could be on the way and bring economies roaring back from their coronavirus-inflicted slumps, JPMorgan strategists said Wednesday.
Such rebounds — which forecast sharp recoveries after short-lived lows — have been the most common trend in economic growth and corporate earnings over the last 50 years, the team led by John Normand wrote in a note to clients. While the US and global economic output may exhibit a slower U-shaped recovery as activity takes several quarters to normalize, gross-domestic-product growth and profits can surge to previous highs much faster.
Oil held in storage at sea approaching 2009 record as glut builds up
Jonathan Saul – Reuters
Oil traders are storing as much as 80 million barrels of oil on tankers at sea, with further ships being sought as land storage sites fill up fast due to a global glut of stocks, shipping industry sources say.
Traders rushed for storage after global oil demand collapsed by a third due to the coronavirus outbreak, and as top producers Saudi Arabia and Russia have refused to curb output so far, creating what is believed to be the biggest oil glut in history.
Exchanges and Clearing
Cboe Sees Best Monthly Volumes in a Decade, Buoyed by COVID-19
Celeste Skinner – Finance Magnates
2020 continues to deliver good news for Cboe in terms of foreign exchange (forex) trading, with its institutional spot FX platform reporting its best monthly trading volume in March in its history. Specifically, Cboe reported a total trading volume of $1.21 billion in March of 2020. This is the best monthly volume since at least January of 2010, which is as far back as the platform’s records appear to go.
Regulation & Enforcement
Fed eases rule constricting capital for trading firms
Lynne Marek – Crain’s Chicago
Options exchanges and Chicago trading firms got the relief they were seeking when the Federal Reserve gave its blessing of early implementation of rules that ease some capital requirements for banks. The Federal Reserve in a March 27 statement said banks could adopt a new methodology for measuring counterparty credit risk related to derivatives such as options contracts that was slated to take effect April 1 anyway.
In the coronavirus crisis investors cannot rely on the old playbooks
Robin Wigglesworth – Financial Times
Wall Street loves a good playbook. Perhaps it is the prevalence of former jocks on trading floors, but whenever markets become turbulent they look at what worked in similar crises and dust off the same strategies. But the coronavirus crisis is confounding because it looks at once like a mosaic of many previous crises — and also completely new.
New ETF Offerings Dried Up During a Volatile March
Katherine Greifeld – Bloomberg
The dramatic volatility in global markets made issuers in the almost $4 trillion exchange-traded fund industry slam the brakes this month.
As the coronavirus pandemic roiled the world, only four new ETFs started trading in March — the slowest pace since August, according to data compiled by Bloomberg. That’s a steep drop from the 29 funds that were launched in February, the best month since November 2017.