US Dollar, S&P 500 Price Analysis:
- It’s been a brutal two week stretch for the risk trade.
- The G7 Group of Finance Ministers hosted a conference call this morning.
- Will recovery continue to show across global markets after a two-day bright spot?
S&P Holds on to Gains as US Dollar Stabilizes
It’s been a busy past two weeks in global markets and the potential for drama remains as the world wrestles with a potential pandemic that continues to spread. Information at this point still seems to be at a premium as coronavirus cases outside of China are still of a relatively small sample size; and for those in China, it may be difficult to project based on the veracity of that data. This provides considerable uncertainty across markets and that’s something that market participants generally abhor.
That uncertainty rang loudly last week as pretty much every stock market on Planet Earth fell, with varying stages of plummet seen depending on the bourse being looked at. The S&P 500 fell by 16% from the high on February 20th to the low seen on last Friday’s open. And it wasn’t just stocks that were on the move, as US Treasuries surged as yields plummeted deep into all-time-low territory, with the 10-year setting a low yield of 1.06%, with the previous low being 1.325%; and the 30-year falling to 1.61%.
These are gargantuan moves in a very short period of time; so alarming that the G7 Group of Finance Ministers have already started to attempt an address at coordinated action[1], taking place in a conference call this morning. Will this help to stave off further selling? Or will markets only continue to growl until a more cohesive strategy or approach is produced by the world’s
