Mumbai, 11.06.2020: On Thursday world shares took their biggest tumble in five weeks as a sobering outlook from the U.S. Federal Reserve challenged market optimism on the global economy, to ensure recovery bonds rallied on bets yet more stimulus would be needed.
Europe’s main bourses all opened with a heavy thud and Asia saw a 10-day winning streak come to an abrupt finish and
On the other hand London’s FTSE, Frankfurt’s DAX and Paris’s CAC40 were all down more than 2.5% in what for coronavirus-sensitive sectors such as carmakers and travel and tourism was a fourth straight day of drops.
On wall street, MSCI’s 49-country index of world stocks slid 0.75% in its largest daily loss in five weeks, while E-Mini futures for the S&P 500 fell 1.5% to extend the previous session’s pullback.
Recently, the stock markets of euphoria, the Fed predicted the U.S. economy would shrink 6.5% in 2020 and unemployment would still be at 9.3% at year’s end.
The recovery would be a long road and that policy would have to be proactive with rates near zero out to 2022.
JPMorgan economists said, “While Powell did not commit to any new action at this time, his focus on downside risk and uncertainty reinforces the message that they will take further action, probably by September.”
Powell confirmed the Fed was studying yield curve control, a form of easing already employed by Japan and Australia.
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Stocks spooked, bonds rally on downbeat Fed in Global markets
