FXTM: 'feels like we are living in a science-fiction movie'
Global equities remain in a free fall, with market participants feeling like they are caught in a “science-fiction movie,” said Hussein Sayed, chief market strategist at FXTM. Stocks nosedived across the globe again Thursday, while oil also plunged. Many companies reportedly are drawing down their credit lines after the World Health Organization declared the coronavirus a global pandemic, Sayed noted. He pointed out that Wednesday officially marked the end of the longest-ever bull market for the Dow Jones Industrial Average, which closed 20.3% below its February record high. “Markets are in complete crisis mode, past economic data has zero influence on investors’ decision, central-bank emergency easing policies are not being effective and politicians’ actions are only adding more confusion,” Sayed said. “The one thing that investors are monitoring is how fast the coronavirus is spreading, how many lives it is taking and the number of countries and cities in complete lockdown. It literally feels like we are living in a science-fiction movie.” The strategist characterized U.S. President Donald Trump’s address to the nation Wednesday night as “underwhelming.” Sayedadded, “It shows that the U.S., like many other countries, is unable to provide the right action in response to the virus spread.” Sayed commented that a global recession “seems impossible to escape and a massive decline in corporate earnings is inevitable,” which will be especially problematic since corporations around the globe are over-leveraged after more than a decade of low interest rates, leaving companies with weak balance sheets and “extremely vulnerable” to economic shocks. “If the current health crisis develops into a credit crisis, we may see a further deep sell-off in equity markets as many companies won’t be able to survive for several months,” Sayed added.