Since March 2009, it went with the stock exchange in the world almost to the top. The fear of the economic consequences of the Coronavirus has prepared for this Trend to an end. Since Monday, the stock exchanges around the world are in closeout mode. Never more since the financial crisis, the share prices have fallen within a week as strong as in the expiring. Only the shares on the Swiss stock exchange as measured by the benchmark index, the SMI-week period within lost almost 12 percent of their value. Alone on this day again to 3.67 percent.
An example of the crash of the European stock markets, the German DAX-Index. Since the Friday of the previous week, he is more than 12 percent in the Minus.
In the same scope, the price losses in the USA and Europe. In the United States the shares have lost as measured by the Dow-Jones Index of closing price on last Friday until Thursday, more than 11 percent of its value. This Friday, the Index lost after the start of trading again 1000 index points.
Although, so far, been more affected by the crisis, also lost the Japanese Nikkei Index in the past week significantly.
Dramatically in the height of the so-called volatility indices are shot against. They are considered to be afraid of indicators of the stock exchanges. The value of the VSMI for the Swiss stock market has doubled within a week, from around 13 to more than 33 points more than. Here the same trend as the VIX for the US stock market. These indices are calculated from traded options, and because of the uncertainty of the investors is reflected especially in their prices.
until last week, dominated the capital markets, the Conviction that the spread of the Coronavirus remain mainly restricted to China, and the crisis was quickly over. In the last few days, dramatically increasing the case especially in Europe, was it clear how this assessment misses is. The mood is flipped, brings the following quote from a market strategists to the news Agency “Bloomberg”, on: “The investors sell first and ask then questions as to the reasons.”
the largest shares of those companies that are particularly affected by the fear of the Virus, and the cautions fell in the last week. This applies, for example, for the airlines, because business travel is expected anywhere diminish greatly. Lufthansa, the parent company of the Swiss, lost within a week, more than a fifth of their market value.
so Far the economic consequences associated with the spread of the Virus, especially China, in the center. The question was, how the failure of production growth in the world’s second largest economy sites in the world and the international value chains affected. The previous estimates do not suggest a significant weakening in the processes of economic development there, but in the entire world economy.
reason is an extreme uncertainty
But now the speech is in connection with the Virus in analyst and media reports increasingly of a “black Swan”: In allusion to the best-seller by Nassim Nicolas Taleb is meant to be a surprising event to exist, the consequences of which no historical template, and therefore, no probabilities can be calculated. This extreme uncertainty is, the more suppressed especially at the courses.
It is not possible to predict how the disease affected also in the Western countries, the production processes and the demand for the other, and thus the economic situation of the company and the overall economy. The economic situation was already in front of the Virus unstable. This is especially true for the industry.
so Far, the Central banks, the syringes have been provided with money for economic Confidence and rising share prices on the stock exchanges ever. Already has set the expectation that the Fed in the US will reduce interest rates in the current year, up to three times more. The influence of the Central bankers remains up to date, but it is not only limited, because the interest rates are already extremely low, but mainly because monetary policy can provide, at best, for a larger demand. However, if Employees no longer appear to work and the production chains be broken, also can not help Money slots. The terms on the stock exchanges.
Created: 28.02.2020, 18:54 PM
