25.09.202016:26 Forex Analysis & Reviews: COVID-19 poses another grave threat to stock markets

The US stock exchanges showed positive dynamics at the close of the trading day on Thursday, however, the overall session was extremely volatile. During the day, the major stock indexes significantly lost their positions. The Dow Jones sank 1.92%, the S&P 500 fell by 2.37%, and the Nasdaq tanked 3.02%.

Serious pressure on the market continues to be inflicted by the US government. The authorities cannot overcome the disagreements on the issue of additional measures to stimulate the economy, which are necessary to overcome the crisis that has arisen against the background of the coronavirus pandemic. In addition, the crisis itself is likely to worsen, as new cases of COVID-19 infection are becoming more and more frequent, and some countries have already begun to introduce repeated restrictive measures to contain the second wave of the pandemic.

The deficit in the decision on the new stimulus program has already led to a decline in the level of the country's GDP. According to updated data, growth in the fourth quarter will not be 6%, but 3%. At least it is clear that the remaining payments under the previous program are now being processed, and new ones should not be expected until next year.

Statistics on the US labor market was also released on Thursday. The number of new applications for the unemployment benefits last week, which ended September 19, was around 870,000. A week earlier, the level was revised from the announced 860,000 to 866,000. All this went against the initial forecasts which estimated the figure to not go higher than 840,000.

Against the background of mistrust in the Fed's new course, which is being expressed more and more, as well as the ineffectiveness of its chosen monetary policy and the lack of budget support, any weak statistical data will lead the market into a state of panic and inevitable reduction of the main indicators.

Against the background of distrust of the new rate of the Fed, which is expressed frequently, as well as the inefficiency of its chosen monetary policy and lack of support from the budget, any weak statistics will lead the market to a state of panic and the inevitable reduction of the major stock indexes.

Meanwhile, the chairman of the US Federal Reserve has repeatedly stated that budget spending can help to accelerate the achievement of the target result on the unemployment rate and stabilize inflation in the country.

The Dow Jones Industrial Average rose 0.2% or 52.31 points, pushing it to 26,815.44 points.

The S&P 500 index rose 0.3% or 9.67 points, and its level was within 32,46.59 points.

The Nasdaq Composite Index added 0.37% or 39.28 points, which sent it to the level of 10,672.27 points.

On the stock exchanges of the Asia-Pacific region today there is also an increase in almost all major areas. The positive here is due to the growth of American indicators, as well as the hope for the introduction of stimulating measures in the United States.

The Asian stock exchanges also experienced an increase in almost all major areas. The positive was due to the growth in the major US stock indexes, as well as the hope for the introduction of stimulus measures in the US.

Japan's Nikkei 225 Index climbed 0.6%.

China's Shanghai Composite Index fell 0.3%. The Hong Kong Hang Seng Index supported this trend and sank 0.2%.

South Korea's Kospi Index rose 0.6%.

Australia's S & P / ASX 200 Index gained 1.2%.

Stock markets in Europe today do not differ in the same dynamics, all changes in the main exchange indicators are of a multidirectional nature.

Europe's stocks, on the other hand, traded multidirectional. The general index of large enterprises in the European region Stoxx Europe 600 increased slightly by 0.03%, which forced it to move to the level of 355.96 points. However, this will not be enough to avoid losses for the whole week. Initial data estimated a decline of 3.4%. And then it will be the most negative result since the beginning of this summer.

The UK FTSE 100 rose 0.21%. Spain's IBEX 35 Index went up by 0.28%. The German DAX Index fell 0.43%. The French CAC 40 index supported the negative trend with a decline of 0.6%. Italy's FTSE MIB Index dropped 0.34%.

Investors fear the recurrence of the situation in spring, when the coronavirus pandemic paralyzed activity in almost all of Europe. In this regard, market participants continue to closely monitor the cases of COVID-19 around the globe and especially in the region. Any sharp dynamics leads them to a panic state.

Recall that in some European countries, the growth of coronavirus infection is already quite serious. UK and France, in particular, already warn about the possible introduction of quarantine restrictive measures to contain the second wave of the pandemic. Of course, these measures do not encourage investors to work productively.