Us Margin "Bear Market" Edge Wander The Fed Next Week Or Again To Cut Interest Rates, Trump Intends To Launch A Major Economic Plan.

[global war epidemic]

The S & P 500 index plunged more than 7%, triggering fuses for the first time in 23 years, and the Dow Jones index slumping 2000 points on 2020. The March 9th black Monday will no doubt be included in the US stock market history.

This day should be a "bull's Day". 11 years ago, 2009, March 9th, it was the beginning of the longest bull market in the history of the US stock market. It was unexpectedly hit by an oil black swan and suffered an avalanche collapse. At this point, the three major indexes of the US stock market have dropped more than 19% from the high level, hovering on the edge of the bear market.

? ? ? US President Trump Speaking at the White House Conference on the same day, "confidence shouting", said Tuesday after talks with Republican members, will launch a very "significant" economic plan to help the new crown pneumonia hit the most serious areas. "I will hold a press conference to announce the economic measures we are adopting, which will be very large." He said.

US Treasury Secretary Mnuchin met with Russian ambassador to the United States Anatoly Antonov on 9 th, emphasizing the importance of "orderly energy market" to Anatoly Antonov. The fuse of the stock market crash is the oil price war triggered by the breakdown of Russia's OPEC reduction agreement.

According to Russian media reports, Russian energy minister Novak said in March 10th that OPEC would be able to regain control of oil production if necessary, and OPEC had the means to achieve this goal. This statement gave the oil market a sigh of relief. Brent crude and WTI crude rebounded more than 8% on Tuesday.

Amid all kinds of "confidence" and the rebound in oil prices, global stock markets generally welcomed the rally on the 10 day. The three major indexes of the US stock market collectively opened high, and the Dow Jones index rose to 800 at first. But as of press release, Dow rose narrowed to about 300 points, or 1.2%, the NASDAQ rose about 1.8%, and the S & P 500 rose 1.6%.

Some analysts believe that the Fed cut interest rates in advance and cut interest rates by 50 basis points. Gan Jun system

The market expects the Federal Reserve to cut interest rates again next week.

When stocks and other risky assets were sold out madly, investors rushed into the US debt market to seek refuge. The yield of benchmark 10 - year treasury bonds fell 9 for the first time on the 9 day, and the 30 - year US bond yield fell below 1%, a record low.

At present, as the market panic has eased, the US bond yields have generally rebounded. As of twenty-first Century, the economist reported that the 10 year US bond yield returned to over 0.7%, and the 30 year yield returned to more than 1%.

Xia Chun, Noah's chief research officer, pointed out that the core cause of the market turmoil is the impact of the epidemic on the production and trade under the global layout, thus triggering the re pricing of the bubble assets, and the market is dominated by investors' strong risk aversion. The change in the oil market on Sunday accelerated the adjustment of the capital market.

CMC Markets market analyst Yang Yan (Margaret Yang) also believes that the fall was resonating by multiple negative factors, including a global outbreak of the new crown virus epidemic, resulting in an economic slowdown. Saudi Arabia and Russia gave up production and led to a sharp fall in oil prices, and the valuation of the US stock itself was high enough to be sold.

"The US stock market is experiencing a" two week shock ". The Dow Jones index has dropped nearly 20% from its historical high since mid 2, and is at the edge of the" technical bear market ". The speed of this round of slump is rare, and the impact on investor confidence is huge. There is still room for inertia in the short term. Yang Yan said.

Although the Federal Reserve cut interest rates on Tuesday, trying to stabilize the financial market in turmoil, easing the anxiety of Wall Street on the economic risks of the epidemic, but failed to achieve the expected "rescue" effect, the US stock market in the past week is still the trend of ups and downs.

Some analysts believe that the Fed cut interest rates in advance and cut interest rates by 50 basis points. But in fact, the market wants the fed to do more and continue to cut interest rates next week (17-18 March) at the monetary policy conference.

Goldman Sachs economist Jan Hatzius, in the latest research report, predicts that the Federal Reserve will cut interest rates by 50 basis points at the March Conference on interest rates, and at the April meeting, "ultimately" to cut interest rates by 50 basis points, and the rest of the world's central banks will also be more relaxed.

"The probability that the Federal Reserve will continue to cut interest rates is very large. At present, according to the implied volatility of the CME futures market, the Fed will cut interest rates by 75-100 basis points in March 18th and step back to the zero interest rate era. The 10 year treasury bond rate in the United States dropped from 1.6% to 0.6%, which also reflected the expectation of a sharp cut in interest rates. Yang Yan said.

But Yang Yan pointed out that this may give short-term buffer to the market, but it can not fundamentally prevent the possible economic recession caused by the spread of the epidemic. Moreover, the bullets of early monetary policy will have no interest when the real economic crisis breaks out.

Xia Chun also believes that the entry of hedge funds into bonds, Japanese yen and gold will cause the Treasury bond yields to fall sharply, which will force the Federal Reserve to cut interest rates again by 50 basis points in March 18th. But he also stressed that liquidity easing is mainly used to solve the tension in the credit market and can not solve the problems of production and trade.

Trump promised relief measures

The outbreak of the new crown pneumonia is spreading all over the world, and the domestic situation in the United States is not optimistic. According to the data tracked by Johns Hopkins University, as of March 10th, the number of confirmed cases in the United States has reached 761 cases, with 116152 cases worldwide and 4088 cases of deaths.

In order to contain the spread of the epidemic, senior health officials in the United States have appealed to the public to avoid participating in large-scale activities, urging people to avoid cruise and air travel, while the United States is also stepping up travel restrictions on severely affected areas. Hi-tech enterprises in Silicon Valley also require employees to telecommuting at home. These measures will have a certain impact on economic activities.

Following the signing of the $8 billion 500 million anti epidemic funding program, Trump announced at a White House news conference Monday that major measures will be taken to combat the economic impact of the epidemic. "We will discuss possible wage reduction schemes or make substantial reductions. This is a very large number." Although no specific details were provided, he has said that a press conference will be announced on Tuesday.

US media reports indicate that Trump's remarks indicate that the White House is considering a major and expensive response to the epidemic. According to a forecast data from the the Committee for a Responsible Federal Budget, if the payroll tax is reduced by one percentage point, the government will reduce the tax revenue from 55 billion to 75 billion dollars. In addition, the White House plans to meet with senior executives in banks, hospitals and health insurance industry in the next few days, the report said.

? ? ? US finance minister Mu Chin "We have just had a meeting with the president and the economic team. The president has promised to provide us with any demand to support the US economy. We will use all available tools to maintain close communication with regulators," he also said at the press conference. The president has asked the bank's CEO to come this week. We will discuss them to see what they can do to help small businesses affected by the epidemic. "

It is reported that many commercial lobby groups from the tourism, energy, manufacturing and consumer goods industries are pressing the Trump administration and Congress to take decisive measures to curb the economic impact of the new crown epidemic and the collapse of the oil price. Media reports say they are promoting a series of proposals, including expanding unemployment insurance, expanding business entertainment tax relief and providing tax credits to employers of segregated workers.

Judging from recent data, the US economy has not yet been affected by the new crown epidemic. However, as the epidemic continues to deteriorate and the risk of global economic recession rises, the downside risks facing the US economy are bigger and bigger. In March 9th, Moodie, the international rating agency, reduced the actual GDP growth in the us to 1.5% in 2020, down from 1.7% previously forecast.

Yang Yan believes that the current risk lies in the fact that the US government has not taken effective measures to prevent the spread of the epidemic in the mainland, and whether it will lay the foreshadowing of large-scale outbreaks. If the epidemic spreads on a large scale, it may destroy consumption and employment, superimpose the negative spiral effect caused by the stock market recession, and the consequences will be difficult to estimate.

From a global perspective, "Europe and Japan are at the edge of the economic and technological recession. In the fourth quarter of last year, Italy saw strong growth momentum, while China saw the bottom rebound, and the market saw them as the main driving force for the global economic recovery this year, but the spread of the epidemic changed that expectation, so the capital market began to re pricing." Xia Chun said.

Xia Chun believes that to get out of the predicament, we need the coordinated actions of the whole world on fiscal stimulus first, but in fact, the difficulty is very great. Second, we need to wait for the turning point of the confirmed cases and the recovery of production and trade, but because of the declining income and the risk of unemployment, families will not be able to recover in the short term, even if they return to work, they will also affect the profits of the enterprises.

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