- The Dow futures indicate a 400-point increase, as the U.S. stock market rebounds from a steep 9.99% drop.
- Fed’s $1.5 trillion liquidity injection and China’s passing of coronavirus peak may recover appetite in global markets.
- U.S. coronavirus testing still remains far behind South Korea and China.
The U.S. stock market has started to recover after the Dow Jones Industrial Average (DJIA) recorded a 9.99% drop on a single day. The Federal Reserve’s guarantee of $1.5 trillion in liquidity injection and the slowdown of the coronavirus outbreak in China are alleviating pressure from equities.
Fear towards coronavirus hit its peak this week after the World Health Organization (WHO) characterized it as a global pandemic. But, low benchmark interest rates across Europe and the U.S., and the “liquidity cavalry” from the Fed are seemingly restoring some appetite in the stock market.
China says coronavirus peak is over, and U.S. will soon see it too
Coronavirus has brought significant instability to the global financial market in recent weeks. It led to further distress in the U.S. stock market as high-profile individuals and politicians got infected by the virus.
The major concern towards the coronavirus pandemic stems from the speculation that it could freeze major economies like it has done in China and Italy, bringing millions of people out of the workforce.
Both China and Italy have quarantined millions of people by imposing a lockdown on large cities. As the coronavirus outbreak in the U.S. worsened, the fear of a large-scale lockdown has intensified.
While the stock market has faced unprecedented levels of sell-off and outflow of funds in the past week, China declared that the peak of coronavirus in the country has…