Coronavirus turns stock markets into the wildest ride on the planet – and that’s not likely to change soon
- US Fed moves this morning to cut interest rates to near zero, boost bond holdings by US$700 billion; US futures plunge
- US$7.7 trillion was wiped out in global market capitalisation last week
Buy, hold or sell?
If you’ve been losing sleep over the nest egg-smashing turmoil in the world’s stock markets, you’re not alone. And if you’ve felt paralysed by contradictory impulses, you can find plenty of online shoulders to cry on in chat rooms.
Even seasoned pros don’t agree on what to do next as the coronavirus pandemic turns global stock markets into wild roller-coaster rides. What they do agree on is that the scary ride is nowhere near over.
“I just closed my eyes and put my head in the sand like an ostrich,” Francis Lun, CEO of Geo Securities, said last Monday as the Hang Seng Index began a tumble that would lead to its worst one-day plunge in two years. Hong Kong’s benchmark would end the week in a bear market. The previous one – sparked by the 2015 China stock meltdown – took two years to dig out of.
This week started early with a bang, as the US Federal Reserve moved Monday morning Hong Kong time to cut its benchmark interest rate by a full percentage point to nearly zero and increase its bond holdings by US$700 billion. US futures plunged. The step came a day ahead of a teleconference call of the Group of Seven nations to talk about the coronavirus.
Other market-moving news is anticipated this week.