Last night, the Federal Reserve launched its most significant policy since the launch of this round of bailout. These include unlimited bond purchases and plans to ensure credit flows to businesses and local governments. However, the Fed’s all-bet effort only excited the market for an hour, and it was still defeated by the impact of the economic stimulus bill being stalled for the second time.
As of the close, the S&P 500 Index fell 2.93% to 2237.40 points; the Nasdaq Index fell 0.27% to 6860.67 points; the Dow Jones Index fell 3.04% to 18591.93 points. “Unlimited liquidity” has caused gold prices to skyrocket. As of press time, U.S. COMEX gold futures closed up US$78.2 to US$1,566.3 per ounce, an increase of 5.26%, returning to above US$1,550 per ounce, the largest increase since 2009.
Crude oil has received major benefits. At this morning’s White House press conference, Trump once again spoke and hinted at the possibility of establishing a joint alliance between the United States and Saudi Arabia to stabilize prices. It is reported that the United States will send the National Security Council to Saudi Arabia as a special energy representative. U.S. Energy Secretary Dan Brouillette has said the possibility of a U.S.-Saudi oil alliance is an idea to stabilize prices. Affected by this, as of 6 o’clock this morning, WTI crude oil futures rose 6.61% to US$25.970/barrel; Brent crude oil futures rose 2.38% to US$29.690/barrel.
In response to the epidemic, various countries have adopted relevant restrictive measures, but this has intensified market panic to a certain extent.
The Federal Reserve failed to rescue the market and the economic stimulus bill was stranded for the second time, and U.S. stocks still fell across the board
An hour and a half before the opening of U.S. stocks last night, the Federal Reserve announced a new round of Massive rescue measures, including unlimited bond purchases, and plans to ensure credit flows to businesses and local governments.
The Federal Reserve said it announced the launch of QE totaling US$700 billion, will purchase at least US$500 billion in Treasury bonds and US$200 billion in agency MBS, and will reset the daily and regular repurchase rate quotation rates to 0%. . In order to ensure market operation and monetary policy transmission, U.S. Treasuries and MBS will be purchased on an unlimited basis as needed. According to the statement, the Fed will purchase Treasury and agency mortgage-backed securities “in the amounts necessary to support the smooth functioning of markets and the effective transmission of monetary policy to broader financial conditions and the economy, as well as agency commercial mortgage-backed securities.”
CCTV Finance commented: Among them, “the necessary scale of purchases will be carried out” is interpreted by the outside market as “unlimited quantitative easing”, which shows the intensity and determination of the Fed’s move this time. firm. Under such a new plan, the Fed’s policy intention is to directly support the flow of credit to employers, consumers and businesses, and it is expected to provide up to $300 billion in new financing. Some experts also commented: “Tonight, the Federal Reserve has put all its bets, and the global market is in jubilation. This is a historic moment.”
As soon as the news was announced, global stock markets immediately surged, and S&P 500 futures It quickly turned from falling more than 3% to rising nearly 4%, and European stocks also rebounded sharply. The U.S. dollar index plunged more than 100 points, and non-U.S. currencies rose across the board. However, the Fed’s largest stimulus in history only excited the market for an hour. U.S. stock futures and European stocks immediately plummeted and entered an inverted V reversal, giving up all previous gains. The three major U.S. stock indexes all opened lower, with the Dow falling 1.23%, the Nasdaq falling 0.47%, and the S&P 500 falling 1.27%. Subsequently, the declines of the three major stock indexes expanded rapidly, with the Dow Jones Index plummeting 900 points, a drop of 5%.
In this regard, some traders said that after such a large-scale release of water by the Federal Reserve, the possibility of passing the third round of U.S. stimulus measures has further declined, which has caused the market to wake up from the previous excitement and give up everything. increase. Whether the U.S. stimulus bill is passed or not has become an important nerve affecting the three major stock indexes at this time. Previously, the third round of emergency economic aid plan proposed by the US Republican Party failed to pass the Senate procedural vote. The Democrats have publicly expressed their disagreement with the plan, but the Republicans still insist on pushing for procedural votes. House Speaker Nancy Pelosi said that if there is still no agreement with the Republicans, House Democrats will introduce their own version. According to the U.S. legislative process, the versions of the bill in the House and Senate must be unified before it can finally be sent to the president for signature into law.
Early this morning, the U.S. fiscal stimulus bill that “can be passed immediately” once again failed in the Senate. In the ongoing voting on the fiscal stimulus bill in the U.S. Senate, it is currently unable to obtain enough votes to support the passage of the bill. Minority Leader Charles Schumer said the Senate will continue talks on the stimulus bill and hopes to pass it today.
As of the close, the S&P 500 Index fell 2.93% to 2237.40 points; the Nasdaq Index fell 0.27% to 6860.67 points; the Dow Jones Index fell 3.04% to 18591.93 points. Although the Federal Reserve released “unlimited QE” before the market opened to stimulate the market, it was still defeated by the impact of the failure of the relief bill.
It is understood that many Wall Street investment banks predict that U.S. stocks will continue to fall. Goldman Sachs predicts that the S&P 500 could decline by 41% from peak to trough. Bank of America believes the sell-off may not ease until the S&P 500 hits 1,800. Credit Suisse predicts that the S&P 500 index as a whole may fall by 35%; the group pointed out that during the SARS epidemic in 2003, the stock market did not bottom out until a week after new infections peaked.
CCTV Finance stated that in terms of oil prices, the Federal Reserve announced policy…�The pressure on finished product output will reappear, thus suppressing its profit level to continue to remain low.
“After the holiday, the main driver of the continued strength of iron ore prices comes from the supply side. However, with the recent significant recovery in the output and operating rate of domestic mines, steel mills will gradually increase the use of domestic mines in the future. proportion, the current tight supply situation of imported mines will be effectively alleviated in the future.” Liang Haikuan said.
According to him, the successive attacks of cyclones in Australia and heavy rains in Brazil have continued to disrupt the shipment of foreign mines. The shipment volume of foreign mines in the first quarter was obviously lower than expected, and the weekly shipment volume of Brazilian mines even fell. to the shipping level during the mining disaster last year. The sharp decline in the volume of foreign minerals arriving at ports has kept the port inventory of imported minerals at a low level. During the same period, domestic mines were affected by major public health events, and their output and operating rates dropped significantly. It was difficult to meet the rigid demand of steel mills, and prices rose significantly. Some steel mills in Hebei turned to Liaoning for iron and steel production due to cost considerations. Purchasing of fine powder. The shortage of domestic ore production has caused steel mills to further increase the purchase of imported ore, and the proportion of imported ore used is significantly higher than the historical average, further exacerbating the tight supply situation of foreign ore. Based on this, traders are generally optimistic about the market outlook and have a clear willingness to raise prices, which also gives the market strong bullish expectations. However, the output and operating rate of domestic mines have rebounded significantly recently. The latest data (March 20) shows that the operating rate of 126 mining companies across the country is 60.97%, and the average daily output of mines is 384,600 tons, which has basically rebounded to the holiday season. front level. Steel plants will gradually increase the proportion of domestic ore used in the future. In addition, the shipment of foreign ore is expected to improve significantly in the second quarter. The current tight supply of imported ore will be effectively alleviated in the future.
In Liang Haikuan’s view, although there will still be a rebound in the short-term market, the strongest point in iron ore fundamentals has passed. “The biggest short-term negative for iron ore still comes from the macro level. As public health events gradually spread overseas, the market has pessimistic expectations for the demand side of major industrial products, and the continued sharp correction of global risk assets has further intensified. This has caused short-term panic in the commodity market. As the prices of representative major commodities such as crude oil and copper have plunged sharply in recent times, iron ore has also been hard-pressed to survive. Before market sentiment improves significantly, iron ore prices will be difficult to recover from. In the independent market, the driving effect of its own supply and demand on prices cannot be revealed for the time being. Even if subsequent prices return to being driven by fundamentals, the best time for supply and demand has passed, and it is difficult for the market price to break through the 690 yuan/ton line again. Steel mills The recent replenishment may provide some support for prices, but considering the current profit level of steel mills, the boost to the market may be limited. There will be opportunities for a rebound in the short-term market, but iron ore fundamentals are the strongest The time has passed, and it is still advisable to focus on short selling on rallies,” he said. </p
