Last week, the United States stock market enjoyed a rally with most assets recording higher highs. However, things were different this Monday as stock futures in the United States and Europe fell. At the same time, Asian assets took a hit. The only good news was that the USD grew stronger for the third day in a trading row.
The United States And Global Stock Market Takes A Hit On Monday
The downtrend started after BASF SE sent a public notice of a slash in its 2019 price forecast. The company cited trade conflicts as the reason for the expected drop. As soon as the announcement was made, auto and chemical manufacturers started to experience a decline in stocks in the Europe 600 index. As this happened, the S&P 500 also experienced a decline for the third time in a row. The poor performance is partly due to panic among investors about the effect of the new monetary policies that the United States Feds are preparing.
In the Japanese stock exchange, the recent gains were lost entirely. South Korea stock experienced slight fluctuations like China and Hong Kong. The global stock exchange didn’t have a good start for the week. The United States Treasuries also declined significantly. However, Italian bonds saw significant gains yesterday as the country sold more debt by attracting borrowers with low cost.
Analysts have predicted that the panic is going to continue as investors wait for the upcoming testimony from Jerome Powell, the Chairman of the Feds. Hopefully, his testimony will give investors a clearer picture of the Fed’s outlook on the United States stock market and the global economy.
Already, the Feds have announced that they would be cutting interest rates this month in a bid to stabilize the economy. Right now, there is no obvious path for future monetary policies and this is affecting investors.