28.02.2020 – Daily Report. The DAX loses over 600 points – and rushes below the 12,000 mark. Global trading plunges into nothingness. The fear of the corona virus and a crash of the global economy can no longer be stopped. And there is probably still some air left: The fear indicator VIX has reached just over half of what it was at the height of the 2008 financial crisis.
Mega-Crash in Frankfurt
The downward trend continues: The German leading index lost 4.5 percent to 11,817 points in early Friday trading. The daily low was 11,727. Before the weekend and possible new bad news about Covid-19, nobody wanted to sit on a portfolio full of shares. With a minus of a good 13 percent, the German index was heading for the biggest weekly loss for eight and a half years.
The 200-day line at 12,641 points is now nothing but a waste of time. Chart analysis is no longer helpful. Only a cool head and a broker with powerful servers – and please with Bafin license. Especially since the contract on the Dow Jones fell 2.7 percent and the futures on the S&P 500 were again 2.4 percent weaker.
Sellout everywhere
Stock markets worldwide are probably experiencing the weakest week since the financial crisis. The MSCI world index has already lost 8.9 percent from Monday to Thursday. Only in November 2008 was the loss higher at 9.8 percent. CNBC reported several markets that have now officially entered into a correction – this is how a loss of 10 percent from the 52-week high is described.
As there are: The Nikkei in Japan, the Shanghai Composite in China, the Hang Seng in Hong Kong, the Kospi in South Korea, the ASX 200 in Australia and the Straits Times in Singapore In Thailand, the SET Composite even slipped around 20 percent off the top. We spare tormented long investors the details. And we only report Friday’s data for the Nikkei: minus 3.7 percent to 21,143 points. The Chinese CSI-300 dropped 3.6 percent to 3,940 digits.
New York bear market
The Dow Jones Industrial index lost almost 1,200 points yesterday, falling 4.4 percent to 25,767 points. Since its record high about two weeks ago, the US leading index has now fallen by almost 13 percent. The S&P 500 also fell 4.4 percent to 2,979 points. And the Nasdaq 100 slipped by 4.9 percent to 8,437 points.
A small consolation for the cops: The high-tech indices have yet to break the 200-day barrier. This line runs at 8,388 points on the Nasdaq Composite and 8,134 points on the Nasdaq 100. No wonder, while the Old Economy is coming to a standstill with the standstill of factories, logistics or tourism, the New Economy is still running a little further via the Internet.
Fastest correction ever
Meanwhile, the VIX has jumped further up to 44.03 points. Something else might work: In the financial crisis of 2008 the fear indicator had reached the 81 mark. Nevertheless: Clever bulls keep their powder dry. Once everyone has sold, the downward trend can no longer continue. Moreover, the past few days marked the fastest crash of all time. The splendid blog ZeroHedge has just listed the days it took to send the S&P 500 times easily 10 percent down (see indices left and right).
Targeting the lira and rouble
And right in the middle of the crash and the possible standstill of the world economy, the conflict between Turkey and Syria is escalating. Perhaps even Russia will be drawn into a regional war. Which would probably do neither the rouble nor the Turkish lira any good.
What the day brings
At the end of the week, the diary brings some interesting events, you will find the overview as always here: Market Mover
However, it can hardly be assumed that the data will be observed at all in these times. Nevertheless:
At 2:30pm the Chicago PMI for February begins.
Ditto personal income and expenditure in January.
And at 4:00pm t he consumer confidence of the University of Michigan will follow.
The Bernstein-Bank wishes successful trades!
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